How will the BP Spill affect Oil Prices

: Image by kenhodge13 via Flickr

So how will the oil spill change your price at the pump. Like we’ve talked about before one of the ways that oil prices increase is if their is a shortage in supply. One of the things this tragedy will cause is a reduction in new drilling permits… and there is no way around that. California, Oregon and Washington has already introduced legislation that would ban drilling off the west coast. The goal of this would be to permanently ban drill off the west coast. One other note is that word is going around that neighboring states would be allowed to veto new oil permits. So if Texas wanted to allow a new bill then Louisiana could veto it.

Unfortunately less supply means higher prices, because I don’t think the demand is going to be going down anytime soon.