On Bauer Business Focus — A conversation on the rising price of gas with Andrew Schneider, business reporter for KUHF 88.7 FM.
The pain at the pump has become more evident in the recent months. With the U.S. economy still in recovery, consumers continue to feel the impact of gas prices going up when their incomes may not be.
Praveen Kumar, chair of the Department of Finance and executive director of the Global Energy Management Institute (GEMI) at the C. T. Bauer College of Business at University of Houston, stopped by Bauer Business Focus recently to discuss what’s driving the price increase.
“The price of oil is being driven by demand, and demand hasn’t slackened off,” Kumar said. “The price of oil is high because the demand has moved to sectors of the world where the growth hasn’t tapered off, and it’s not going to anytime in the future.”
As the demand for oil is on the rise, increasing the extraction of oil has become difficult, according to Kumar.
“Extraction was not as technologically challenged (in previous years) as it is today. Most of the reserves that are available are in challenging places, and even though the price of oil is high, that doesn’t mean that oil production is going to accessible in an easy fashion.”
Click here to hear the full interview.