Mark Flannery wrote the article, ``Shares Climb as Oil Prices and Supply Concerns Ease `` on the New York Times on February 25, 2011. My interest in this article comes from my major, economics. It deals with changes in one of the biggest determinants of economic growth, oil price; therefore making it very informative and appealing.
The article elucidates the effects of rising oil prices on different giant corporations and on the U.S. economy. The writer mentions that war and unrest in Libya, 5th biggest oil producer in Africa, is taking a toll on many other countries and businesses. The writer specifically draws the examples of Boeing, which has suffered a 2.8% decline in its share prices. Economic analysts think the major reasons behind the decline are rising oil prices and proportionately smaller rise in sales. The writer also discusses about the effects of increasing oil prices on the U.S. economy. Analysts calculated the US economy grew at a rate of 2.8% last year compared to the predicted rate of 3.2%.
However, the author only refers to the short-term consequences of an increase in oil prices. In the long run many other factors come into play. For example, an alternative to oil as a non-renewable resource to power industries. Thus I am left with a major question; what are the long-term effects of such an increase in oil prices?
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