Factors That Make The Crude Oil Prices Essay

As the growth in the shale, oil market is continuously increased the input of oil supplies in the market by 11 per cent, which make an oil price fall cause of overwhelming supply (Meyer,2013).As a result of this, the buyer has more choice to seek a supplier , which has a lower prices and better contract condition. Thus, these forces become a high threat to Afren.

In 2016, the crude oil price movement prices were unpredictable. The OPEC reference basket dropped 10 percent to $43.22 per pound. The ICE Brent and NYMEX WTI both went down by 8.4 percent with ICE Brent at $47.08 per pound and NYMEX WTI at $45.76 per pound. This showed that there were uncertainties in the petroleum market. The future prices were predicted for 2017 that it would move higher. The World’s economic growth predictions was the same at 2.9% for 2016 but increased to 3.1% for 2017. Because of the 3rd quarter of 2016 in Japan and US, the OCED growth went from 1.6% to 1.7%. The demand for oil growth in 2016 has been increasing slightly to 1.24 mb/d. In 2017, the demand will be predicted with a decrease to 1.15 mb/d. OECD will

I found current event article by Zumbrun discussing supply or demand of oil in which he attempts to answer collapse of past year oil price whether it was driven by supply or demand. According to Zumbrun (2015), oil demand started out as bad, but turned into the good for supply as concluded by IMF economists based on the World Economic Outlook.

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)

Some emergent countries have put a lot of effort to find new reservoir or find the best way to recover oil from deep seas such as The pre-salt in Brazil. America has high projections for the future with fracking. However, lower prices would put at risk investments in unconventional sources. For example, tar sands, shale oil, deep sea and fracking. Our forecast is that the crude oil price tend to slowly rise until the market balance it self to avoid oversupply especially because of the weakening in the global oil

California has one of the highest gas prices in the United States (Laskoski, usnews.com). However, compared to many developed nations, United States has one of the cheapest gas prices (Hargreaves, CNNMoney.com). Discussion of the reasons gas prices fluctuate is a detailed matter which requires an overview, starting from the extraction of crude oil, chemical processes, regulations, taxes, and gas retail market. The factors that can affect the price at gas station can be categorized into three main categorize including crude commodity prices, technology regulation and taxes, and retail market. As crude oil is the base resource for the production of gasoline (also known as Gas or Petrol, not be confused with Petroleum) its price plays an important

The global price of oil has stooped to dramatically low prices as the demand for oil has died and oil companies are trying to get the demand for oil to raise and stimulate the oil trade. If the oil trade gets stimulated then the price of oil will rise making the supply higher than the demand and making more money for oil

Opportunity: • Increased consolidation. • Increase in consumption of oil globally. • High probability of discovering oil. Threats: • Political influence. • Low possibility of price increase.

From 2014, the crude oil price has dropped in a sudden since the global economic downturn, oversupply of crude oil and the appearance of new energy. Global economy fatigued, and thus the demand of crude oil was not strong,

Since June 2014, oil price has fallen by more than 70 percent. Price has recovered few times last year. However, it has sunk this year to levels not seen since 2003 (New York Times, 2016). This drop of price has affected several firms in the industry which we can mention Chesapeake (CHK). In fact, Chesapeake was quoted at more than $20 until late 2014. Today, it is priced below $5. The oil industry is known for its history of booms and busts. It is not the first time that this industry is shaken. In the 1985-86, supply-driven mainly caused the fall of prices. In 2008-2009, price fallen was entirely due to the collapse in demand. However, this reason behind this recent crisis is a little bit special: “price decline appears

The article entitled “4 Reasons Why the Price of Crude Oil Dropped” by Evan Tarver offer some of the possible reasons. According to Tarver the strength of the US dollar could be one of the reason for drop in the oil prices. Tarver also reveals that Organization of the Petroleum Exporting Countries (OPEC) is unwilling to stabilize the oil market and this has an effect on the oil prices. Other reasons identified in the article include the oversupply of the crude and the declining of the demand.

The most trivial aspect that affect the price of oil is its quality. This is dependent on its sulphur content and where it is mined oil grades. As a result of these different grades of oil, a limited number of reference, Brent, or benchmark has been agreed on by players in the oil market. This is used to value the price of other grades of oil according to quality. However, this is not applied well in the Middle East countries, Brent is mostly used as standard in Europe according to IPE. In the Middle Eastern region, crude is commonly refer to as the benchmark. This is because it’s available on the spot sales as opposed to being in abundant supply as commonly perceived (Chapman 65).

In this text, I concern myself with the contents of two articles based on recent microeconomics issues. During the last two months, the price of gas in the U.S. has been on an upward trend. Taking into consideration recent happenings on the international scene, this trend could have been triggered by many different factors. The articles I make use of in this case discuss the rising oil and gas prices.

From the chart above, we can see that the price of oil increasing from 2002 to 2008, and face a dramatically drop in 2008, and face an increasing trend onwards. The drop in 2008 due to the slow economic growth and reduce the consumption of oil around the world.

The world’s pricing mechanism of petroleum is determined by OPEC (Organization of the Petroleum Exporting Countries) and is quantified by barrels of crude oil. At peak, price of crude oil is USD147.27 per barrel in July 2008 following concern of an impending missile test by