The price of oil has risen to more than one hundred twenty dollars a barrel. Some experts say the most recent price increase is only the beginning. Experts at the investment bank Goldman Sachs have predicted that oil could reach two hundred dollars a barrel.
Unrest in oil producing countries has been partly to blame. Last weekend, a rebel group in Nigeria said it attacked an oil center in Bayelsa state. Nigeria is the eighth biggest oil exporter in the world.
Also, Iraq is slowly rebuilding its oil production ability. Iraq's industry minister says the country's oil production is currently at about two million barrels of oil a day. He says that could increase to five million barrels of oil a day in two to three years depending on how much foreign help Iraq receives.
The Venezuelan government's efforts to control its oil industry have increased tensions with foreign oil producers. And Russia, the world's second largest exporter, has also sought to increase government control of its energy resources. Nationalization of oil resources often forces out foreign investment that would normally seek to increase supplies.
Another cause of high oil prices is the weak American dollar. Oil is traded in dollars, so a less valuable dollar buys less oil. But, experts have noted that the weak dollar alone cannot explain the increase of about eighty-five percent in the price of oil over the last year.
The Organization of Petroleum Exporting Countries is the world's largest oil producing group. It says its member nations, not including Iraq, are investing 120 billion dollars in over one hundred new oil projects. OPEC says it produces about forty-five percent of the world's oil exports.
In the past, non-OPEC producers like Russia, Mexico and Norway have increased production to meet demand. But these nations have struggled to keep production at the levels of recent years. Norway's production, for example, has decreased by twenty-five percent since 2001.
The expanding economies of Asia, especially China and India, have increased pressure on world supplies. Meeting demand appears to be harder than ever before.
And that's the VOA Special English Economics Report, written by Mario Ritter. Transcripts and archives are at voaspecialenglish.com. I'm Bob Doughty.