Okay Americans, we see the rising price of oil ($124 today) and our first concern is how this affects gasoline prices. I know you think that way because I think that way. Every time you hear about the rise in prices, you think about how much it's now going to cost to fill up your tank. Ancillary concerns include the rising price of food (which needs to be transported) as well as lack of money for working-class families to spend on other necessities. But what about the rest of the oil? The U.S. doesn't consume all the world's petroleum by driving cars, so what else happens to it? Well, the fact is it's used as fuel in many other countries as well. However, according to the EIA, in developing nations oil is also used in ways that might be considered wasteful to Americans, such as being burned in power plants to fuel generators. However, this is down from 30% of the usage of heavy oil in the 1970s to just 7% now. And, sorry to say Americans, but we use it in this way as well, just at much smaller rates. Countries such as China and India buy up the oil for fuel, but since their supplies are run by national oil companies, profit is not as big a concern as pleasing their constituents, which means they'll take a loss when selling the fuel to keep the economies growing. Oil is still used to heat many houses, including those in the U.S. Northeast, where New England winters can be quite fearsome. Most new homes are being built to utilize gas, and older neighborhoods are starting to switch too, but a sizable enough portion remains connected to the distillate market. The U.S. and Canada use the majority of their oil supplies for transportation with a minimum used for "stationary" activities like power and heating, but the EIA states the opposite holds true for the rest of the world. This means global demand is highest in the Northern Hemisphere during the winter months, when the demand for heating oil is highest. Oil prices on the other hand tend to be highest in the summer when refineries are shut-down for maintenance, limiting the amount of refined product (i.e. gasoline) regardless of production figures. The U.S. and Canada also use more oil per person, coming to about three gallons oil of oil per capita per day. The rest of the industrialized world uses about 1.3 gallons, while the rest of the world uses about 0.25 gallons. –Stephen Payne, Editor, Oil and Gas Investor This Week; email@example.com
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