Oil dependent economies are more volatile

In a recent article, we claimed that oil dependent economies were more subject to volatility and instability in the longer term than those based on renewable energy sources. As oil stocks dwindled coupled with growing consumption by emerging economies, demand would increase and supply decrease thereby heightening the potential for conflict, further fuelling instability in global markets. We also claimed that mere comments by political leaders were enough to affect oil prices, with knock-on effects for the stability of global markets. A recent news flash in the Financial Times (1st December 2009) nicely illustrates this point: “Oil rose 1.3% to $78.31, adding to gains of the previous session following news that a UK yacht had been detained by the Iranian authorities.” Dr. Gary Robertshaw The Green Providers Directory