Tags: India | oil | price | crude

Christian Science Monitor: India is Big Factor in Oil's Sharp Spike

Thursday, 15 March 2012 01:09 PM

Geopolitical tensions with Iran, speculators and U.S. refinery closures largely grab headlines over spikes at the gasoline pump, but crude oil demand in India is a big driver as well.

Like China, India is developing its large economy and needs more oil to feed its growth as well as fuel the growing number of automobiles hitting Indian highways.

"Already the fourth largest energy consumer in the world, India's demand for oil looks set to rise inexorably as more of its people buy cars and take to the road," the Christian Science Monitor reports.

With demand rising in India and in China as well, producers aren't going to rush to supply the U.S. as fast as they used to.

Plus oil companies don't want to invest in new refineries in the U.S., either, but prefer investing in new markets.

"You go where the growth is," says Andy Lipow, an independent oil analyst in Houston, the Christian Science Monitor adds.

India is home to the largest oil-refining complex in the world, which could supply the U.S. with more and more gasoline in the future.

U.S. gasoline prices, meanwhile, are now averaging over $4 per gallon in Illinois, California, Alaska, Hawaii and Washington, D.C., the Associated Press reports.
Oregon, Connecticut, New York and Washington state are about to join the club.

U.S. ally Saudi Arabia says no matter what happens with Iran, the Arab country will ensure supply should tensions escalate into conflicts and production falls.

"Saudi Arabia and others remain poised to make good any shortfalls — perceived or real — in crude oil supply," says Saudi Oil Minister Ali Al-Naimi, the Associated Press adds.

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Thursday, 15 March 2012 01:09 PM
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