Oil Prices Affected by Far More than Speculation, Expert Says
ST. CLOUD – A nationally renown oil expert says oil prices are rising worldwide – but we shouldn’t necessarily blame it on speculators.
James Hamilton, Economics Professor and oil expert from the University of San Diego, says history has shown that world events, conflicts and resulting oil supplies affect fuel prices – not simply speculation.
Hamilton spoke on Thursday during the Winter Conference at St. Cloud State University.
During his 1.5 hour long Power Point presentation, Hamilton described a century of the history of oil costs and statistics. He highlighted half a dozen world conflicts from history, like the Persian Gulf War, and explained how the situations resulted in smaller oil supply and corresponding higher costs.
He also explained how oil prices affect consumer spending – as the costs of energy rise, the amount of money people spend on goods and services will decline. Hamilton says the chain reaction between oil prices and spending, and what a significant aggravating factor it was in our most recent recession and those before it.
Lastly, as gas prices continue to climb, Hamilton reminded the audience that they’re still not as high as they were last year. With the adjustments consumers have made in a tough economy to afford these energy costs, Hamilton doesn’t believe it will kick-start another recession.
And for the over 75 members of Hamilton’s audience looking at the statistics and evidence from decades past, that idea spelled more fact than speculation.