August 2014, Vol. 241, No. 8
Features
Oil Prices Rise As World Walks Supply-Demand Tightrope
The world is walking a tightrope of oil supply and demand. Today, supply exceeds demand by a very small amount. This difference is small enough that a major disruption in supply can further tip the balance in the direction of demand. More importantly, the trend is toward flat to declining supplies and increasing demand. Given this, the possibility exists that worldwide demand will exceed the available supply in the foreseeable future. At that point, the difference has to be made up by increasing supply, reducing demand, or by drawing on available reserves. The balance between oil supply and demand has a direct effect on oil prices, and most of the advanced economies of the worl
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