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Global economic recovery is increasing demand for oil as unrest in Mideast puts supplies at risk.
The price of crude oil is set by supply and demand in the global marketplace.
Rising crude oil prices are an indication that a recovering world economy is increasing demand for more energy around
the globe.
While growth is concentrated in Asia and the Middle East, U.S. demand for gasoline is also growing, increasing an
average of 4.1 percent from January to March 2011 (API estimates).
With the worldwide economic recovery underway, demand is on the rise again as unrest in the Mideast has put supplies
at risk. This combination of rising demand and reduced supply is helping to push prices higher.
Oil and natural gas companies pay an effective tax rate of 41.1 percent, compared to 26.5 percent for all other S&P
Industrial companies.
More taxes would deter domestic investment and thus reduce potential production.
Increased production would produce higher government revenue than would higher taxes.
A new study from Wood Mackenzie found that from 2011 to 2025, negative economic consequences of higher taxes
will, in the long run, more than offset any short-term gains in tax revenue.
More important, the study shows that increased access and development of domestic oil and natural gas resources
would create an additional half million jobs by 2025.
May 2011