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The fact that we are concerned by the possibility of violence in Nigeria impacting the flow of oil imports into the U.S. is reflective of just how tenuous the supply of oil has become. Even without geopolitical turmoil in Nigeria, the price of oil has rocketed to over $80 a barrel within a very short period of time. There has not been hurricane damage to Gulf of Mexico oil rigs. Other than Iraq, there are no major wars raging in the Middle East. Virtually all major oil producers are currently enjoying relative peace.
So why is the price of oil climbing so dramatically??? The simple answer is because there is not enough being produced to meet rising demand. Indeed, the overall production high point took place in 2005, and it hasn't surpassed it since. We are currently using over two barrels of oil for every one barrel that is being discovered. That is a recipe for disaster.
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