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Page added on October 30, 2007

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Oil: No longer a heavyweight

Higher efficiency, a more diverse energy mix and a more prosperous nation have softened rising oil’s economic punch.


NEW YORK (CNNMoney.com) — The days of rising oil prices alone threatening to knock out the economy may be over.


At more than $93 a barrel, oil prices are at or near all-time highs, even when adjusted for inflation.


Yet the economy has so far withstood the impact of rising crude. By contrast, the last time crude prices were this high, in the early 1980s, the economy tanked.


It’s not like oil no longer matters, but it’s clear the the energy economy has changed dramatically. Efficiency gains, higher prices driven by demand – not supply – a more diverse energy mix and the fact that people simply make more money means that energy no longer pulls the overall economy like it used to.


CNN



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