Analysis of Future Demand of OPEC Oil

Several oil-countries have been facing economic and political turbulence as a result of the crash in oil prices, and there is disagreement among OPEC as how to handle the situation. (Krauss) While this is happening, America’s oil production continues to rise, as it inches closer to becoming an energy superpower in production and consumption; and countries that depend on their oil exports face recession.

It is estimated that 1.3 trillion barrels of oil reserve is left in the world’s major fields (Institution of Mechanical Engineers 2015). At present rates of consumption this will be enough oil to last approximately 40 years. By 2040, it is intended for production levels may be down to 15 million barrels per day which is approximately 20% of the amount of oil which is currently being consumed (Institution of Mechanical Engineers 2015). It is likely by the year 2040 that the world’s population will be twice as large (United States Census Bureau 2015). Additionally, it is likely that more of the world will be industrialized and therefore more dependent upon oil.

Middle East is strategically important region where mostly world half of oil reserves are located. Three countries: Saudi Arabia, Iran and United Arab Emirates accounted for 57% of total Middle East liquids fuels production. (Liquid fuels production in Middle Eastern and North African countries n.d.) Although due to increased domestic production of petroleum and natural gas, the United States is reducing its dependence on foreign oil with imported liquid fuels, but still oil means a lot to the US as oil prices is determined internationally by what is available for all global consumers. Therefore, to safeguard the security of Oil supply in the Middle East and ensure stable access to affordable oil is in the vital interest of the America. (Mexican crude oil shipments to Europe and Asia are rising as U.S. imports fall

The United States consumes more than 25% of the world’s petroleum products which is a large percentage, considering only 3% of the world’s oil reserves are produced by the United States. Given the demand for petroleum products such as gasoline, understanding why Crude oil prices have skyrocketed in recent years, is not hard. According to the article “Ending America’s Oil Addiction,” the surge in crude oil prices can be reduced in large part to the simple concepts of supply and demand. (Cooper, 2008)

The featured article “The End of Oil,” the author, Alex Kuhlman argues that oil production is decreasing due to the costs of production are rising because cheap and easily accessible oil is hard to find despite increased consumption.(Kuhlman, 2007). Kuhlman (2007) provides evidence both from oil demand and supply aspects to illustrate the imbalance which causes the end of oil.

Our world economy depends upon petroleum; petroleum, in fact, has shaped the modern world. It has dictated production technologies and methods. It has facilitated the emergence of a worldwide transportation network. It has allowed cites to grow and expand, and determined the spatial landscape of regions. Due to our great need for petroleum, the scope of OPEC¡¦s power surpasses our prowess as an economic superpower, considering OPEC regulates the output and the price of oil from their reserves.

Oil-The article”OPEC #1”explains the oil prices.The Oil of the Middle East is the price of oil has fallen by nearly half in just six months.Anyone who buys oil or gas is happy because the prices are low.Car and truck drivers, airlines, and shipping companies are all happy because they don't have to spend as much money on gas. Oil companies are not very happy. They are losing money.A barrel of oil now costs $58 and last summer it was $107.Oil prices have gone down and people are happy,at least some of

After the industrial revolution, the demand for oil has been increasing globally. Over 100 million tonnes of oil are transported around the world on average a day. There are countries like the US which consume almost one quarter of global oil output, which must be supplied from oil reserves, usually from countries like Saudi Arabia (Guinness, 2011, p. 245). This shows that the topic of oil consumption is a global issue as all countries need oil to develop and provide for their populations. The issue with this large consumption of oil is the fact that oil is a non-renewable source of energy and therefore has a limit. Oil is formed

In addition to the decline of the Chinese economy, demand for oil is also affected by environmental concerns because burning oil creates carbon dioxide, a greenhouse gas that is contributing to global warming. In recent years there has been a growing emphasis on reducing carbon emissions in order to become more environmentally friendly. Businesses, countries, and consumers are encouraged to pollute less and leave a smaller carbon footprint. For example, China, the world’s largest consumer of oil, now holds the most wind turbines which shows a push to become less reliant on oil and more environmentally friendly. This is especially evident after the recent United Nations Conference on Climate Change, or COP 21, which was held in Paris last December. At this conference world leaders agreed to combat global warming by trying to reduce greenhouse gas emissions and aiming to become carbon neutral by the second half of the century. This will certainly negatively affect the demand for oil not just in the present, but for years to come as the world tries to shift from a strong oil reliance to alternative fuels. Although the world may be in search for of alternative fuel sources, cheap oil hinders this search because it lowers its incentives. The

OPEC, The Organisation of the Petroleum Exporting Countries, is a name that has become synonymous with the worldwide petroleum market. But what does it do, who is involved and how important is OPEC to our day-to-day lives? This article aims to answer these basic questions in a clear and concise fashion.

Crude oil and its byproducts since its discovery is one of the most basic input to the world particularly for energy. It is important to human existence and also, finite in supply. It has several other uses which include: hydrocarbons for plastic, pharmaceutical, and other basic day to day items. More so, most of our equipments depends on oil and its product to enable them work. Like every other product that is traded in the international market, oil prices are influenced by its demand and supply in the market and also its type. Various shocks have made the price fluctuate and it can be said to be one of the most volatile product in terms of its response to

World oil demand is increasing as emerging economies need more energy to increase their living standards. Estimates, shown below, are that by 2030, China and India as emerging markets will import over 70% to 90% of their fossil fuel needs (1) . Coupled to a continued high and growing demand for oil, makes this a robust market for the next 30 years.

Economist has analyzed the causes of decline in world oil prices. Typically, the price of oil is determined by demand and supply of the world market and forecast advance to invest in which level of demand depends on the level of economic activity and behavioral use of energy from humans. The oil price decline has a benefit for oil importers like China, India, Japan, Europe but unfortunately for oil exporters such as: Kuwait, Venezuela, Nigeria, and Iraq. Crude oil prices fell steadily in the past seems to be a result of two main factors being the levels of demand declining and a level of increased supplies (Economic, 2015)

In the recent years, overall demand growth for oil is strong in Asia pacific region and North America. The consumption of energy resources in major developing and industrial countries, namely, China, India and Brazil is expanding rapidly, but on the other hand, G7 countries where most of the demand of oil are consumed, demand for oil has been static and seems to be reduced from last few years. In 1990s, U.S and G7 countries were top consumers of oil, at present BRICs countries and China, are becoming greatest consumers of oil, although G7 countries and U.S are reducing their demand as compared to past two decades but still their demand is higher even from BRICs and China.

The impact of oil price on the social, economic, political and many other aspects of human life is substantial. Oil exemplifies a vital role in the world economy as the backbone and origin of numerous industries. In global markets, it is the most active and heavily traded commodity. Global oil prices have fallen sharply over the past few months, leading to significant revenue shortfalls in many energy exporting nations. From 2010 until mid-2014, world oil prices had been fairly stable. WTI crude oil has declined ~58% since the middle of June 2014. Brent crude oil has also declined ~69% from mid-June. Recently many studies have emerged to discuss the problem of predicting oil prices and seeking to access to the best outcomes. This paper focuses on the use of a data-driven approach to predict crude oil prices using Automated Learning of Algebraic Models for Optimization (ALAMO) and comparing its results with the tools and techniques used in the past.