There are increasing risks to U.S. supplies of oil and gas going forward, depletion of existing U.S. oil and gas wells, limited access to known low-cost reserves in foreign lands or on U.S. federal lands, trade restrictions, environmental regulations and political and economic unrest in Latin America and the Middle East, according to Standard & Poor's oil and gas equity analyst Tina Vital in Standard & Poor's industry survey on oil and gas equipment and services.
"Standard & Poor's estimates that a war premium of approximately $4 per barrel is reflected in current global oil prices. Our DRI-WEFA model indicates that each $10 rise in oil prices would cut real GDP by 0.5%. If the price of oil rose to over $30 per barrel, from its current price in the mid-$20 range, the impact would be significant, but not enough to cause a recession. However, if the price of oil climbed to $50 per barrel or higher, then the implications for the economy would be much more ominous," she said.
