Oil and gas correlation Research Paper Example | Topics and Well Written Essays - 250 words

Oil and gas correlation - Research Paper Example It would therefore be important to explain why and the possible reveres resolution (Ross 42). There has been an increased shift towards use of gas in production of domestic electricity against the small oil use. This factor explains the increasing trend of negative correlation between the two commodities as noted from late 1970s (Roberts 51). It is also evident that from 1991, the import of oil by US had reduced but this still represented approximately 40% of the consumption by US against a paltry 5% of gas consumption by the US (YeÃŒ pez-Garcia, Rigoberto , and Julie 86). This is an evident case to support the observed negative correlation. The increasing local production of gas by US in 1980s led to the increased supply of gas which affected prices locally and internationally but exhibited consistent trend towards a positive correlation with oil prices (YeÃŒ pez-Garcia, Rigoberto , and Julie 86) . Increased technological advancement which has seen a rise in gas fuelled cars is likely to push the gas prices up. This would initiate the positive correlation between the two commodities. It is also predicted that increased export of LNG by US to the global market will promote the chances of gas offering competition to oil thereby moving in the same direction in terms of prices (CretiÌ€