keannu
VIP Member
- Joined
- Dec 27, 2010
- Member Type
- Student or Learner
- Native Language
- Korean
- Home Country
- South Korea
- Current Location
- South Korea
1.What does this "oil is currently underpriced compared to its fundamentals" mean here? Does it mean "as the oil price is already lower, the government doens't have to lower it"?
2. And what does "fundamentals" mean?
mo3-22
ex)To solve our long-term energy needs, our society needs to move away from oil and focus on developing various alternative energy sources. Yet sometimes out government directs its efforts toward supporting increased oil productoin through a pricing policy. If oil is priced at lower levels by government, people will use more fuel than usual and producers will need to manufacture more oil. This policy is geared toward perpetuating the myth that cheap oil will exist in perpetuity.However, the truth is that oil is currently underpriced compared to its fundamentals and oil reserves will be used up in about 40 years.
2. And what does "fundamentals" mean?
mo3-22
ex)To solve our long-term energy needs, our society needs to move away from oil and focus on developing various alternative energy sources. Yet sometimes out government directs its efforts toward supporting increased oil productoin through a pricing policy. If oil is priced at lower levels by government, people will use more fuel than usual and producers will need to manufacture more oil. This policy is geared toward perpetuating the myth that cheap oil will exist in perpetuity.However, the truth is that oil is currently underpriced compared to its fundamentals and oil reserves will be used up in about 40 years.
Last edited: