World Economy Problems

In today's society one of the most important things every where is crude oil. Today gas prices vary depending on the region people live. However, as a result of Hurricane Katrina the world economy is facing many difficulties. One of them being the rising price in crude oil per barrel, raising from $64 last week to $70 this week. Although oil prices are a big issue in America's society they're not as a big a threat in other places, and are brushed off (so to speak). According to the "Central bank governors from Israel and Iceland said oil risks would be on the agenda when monetary officials from the leading industrialized and developing countries reviewed the global economy at a Group of 10 session on Monday." There is a rise in global energy costs which has been aggravated by Hurricane Katrina. These factors in short term matter will effect global economis growth and inflation. Another issue is the rise in the demand for more crude oil. Officials have urged businesses to take their earnings and open further exploration and new sites for more crude oil. This is a result in studies showing that demand for crude oil will increase 50 percent over the next 20 years, thus further damaging the world's economy. Although the demand for oil and Hurricane Katrina has effected the economy there is a growth in the world by 4 percent. The devastation of Katrina is a half percentage point drop in the U.S. this year, with a boost from the U.S. Gulf in 2006. "Longer term, questions remain over how economies can cope with rising energy prices. Petroleum bills are starting to alarm consumers, arousing concerns that energy will cause a slowdown in spending, sapping healthy world growth."

Can the world economy withstand future problems in energy costs? And truly how important is oil to the world economy?