An Economic Analysis Of The Current Oil Market And Prices

Words: 3206
Pages: 13
Open Document
An Economic Analysis of the
Current Oil Market & Prices

PREPARED BY: Teoh Chern Shi

ID NO: B0075JMJM1112
-------------------------------------------------

-------------------------------------------------

SEMESTER: Semester one

LECTURER: Ellie Semsar

DATE: 20th February 2012
-------------------------------------------------

*

* Table of Contents Table of Contents 2 1 Objective 3 2 Introduction 4 3 Analyze Current prices of oil 5 4 Factors determine the price of oil 7 4.1 Demand and Supply 7 4.2 Exchange Rate 9 4.3 Location 9 4.4 Government policies affect oil prices 9 5 Factors that Determine Market Oil Demand 10 5.1 The price of the main product 10 5.2 The price of …show more content…
People will still buy the product when the price increase or decrease.

As an example, when the price of oil increases by 10%, the demand quantity of oil will drop only 5%. The suppliers make profit when they increase the price, so this cause oil price always increases.

P
Price of oil (USD)
Q
Quantity
(Gallon)
Oil Market
Supply Curve
Demand Curve
Q1
P1
P2
Q2
Weak Response

Figure 6: Inelasticity in demand to price changes

However, consumers will take time to adjust their consumption patterns to price changes; this will cause the oil price become more elastic for long term. For example, they might replace their oil or gas appliance with electric. Moreover, producers might invest and introduce substitutes, for example, they introduce fuel-efficient cars when the oil price increases in mid 1970. (Refer to section 5 for factors that determine the demand of oil)

At the supply side, the oil production process including producing and importing crude oil, refining, distribution and storage. The price of oil will increase when there are problems at the one of these processes, for example, refinery outages, supply cutback, and etc. The price of oil also will increase when political problem in oil production area. (Refer to section 6 for factors that determine the
Show More

Related Documents: An Economic Analysis Of The Current Oil Market And Prices

ECON600 Research Paper 1

overview the four types of market structures: perfect competition, monopolistic competition, oligopoly, and pure monopoly. The author will first define and give an example of each market structure. The paper will go into detail about the characteristics of each, and how it fits in today’s economic climate. Next the research paper will evaluate each market structure’s pricing strategy. Finally the research paper will conclude with a case study on Wal-Mart’s market structure and how it fits into the monopolistic…

Words 3209 - Pages 13

Organisaiontal structures and culture, business environment Essay

Criteria for evaluation 11 3.1.1Fundamental Analysis 12 3.1.2 Technical Analysis 14 3.2Market Performance 14 3.3 Sector performance and Share performance and reasons for price variances 16 3.3.1Life insurance sector and AVIVA 16 3.3.2 Bank Industry sector and HSBC 22 3.3.3 Food and Drugs Retailer Sector and TESCO 28 3.3.4 Oil and Gas Producers Sector and BP 32 3.4 The future performance of the companies 37 3.4.1 AVIVA 37 3.4.2 HSBC 37 3.4.3 TESCO 38 3.4.4 BP 39 3.5 Conclusion 39 3.5.1…

Words 9715 - Pages 39

Case Of Greece Essay

country because of its positive Man and Biosphere project (Num- eastern section of the island and effects on the balance of payments, ber 7), is also giving special attenwith it many ancient buildings and income, and services. In Greece, tion to the affects of tourism on the artefacts. foreign exchange eamt from tournatural and human environment. The majority of the population ism has experienced a continuous Research into the effects of tourof Zakynthos is engaged in agririse and it constitutes an important…

Words 2910 - Pages 12

Essay On Corporate Governance

Corporate Governance: Refers to the relationship among the board of directors, top management, and shareholders in determining the direction and performance of the corporation. Corporate Governance: Role of the Board in strategic management: Monitor what is happening inside and outside the corporation Evaluate & review management proposals, decisions and actions Vote decisions with long-term consequences Establish/Approve strategy, mission, vision Does good governance practice lead to better performance…

Words 4799 - Pages 20

Industry Analysis: the Five Forces Essay

Overview Assessing Your Marketplace The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. Michael Porter has identified five forces that are widely used to assess the structure of any industry…

Words 6827 - Pages 28

The Effect of Derivatives Usage on Firm Value and Performance Essay

Financial Institutions (NBFIs) from the Bursa Malaysia were included as a basis of assessing the reactions to derivatives usage. Whether derivatives usage is value-adding or improves performance will be important in sealing in the fate of a derivatives market in the Philippines. If recent memory of the U.S. subprime mortgage crisis serves well, derivatives do not eliminate risk, they only replace it. The Philippines is in no position to decide whether the benefits of derivatives usage are large enough…

Words 12992 - Pages 52

Europe And International Business Strategy

SUBSIDIARIES7 2.ACQUISITIONS7 3.JOINT VENTURES7 EVALUATION OF INTERNATIONAL STRATEGIES8 Advantages of lastminute.com's global strategy9 Disadvantages of lastminute.com's global strategy9 PART 2: STRATEGIC DEVELOPMENT FOR FUTURE EXPANSION10 MARKET SCREENING & CHOICE10 STRATEGIC DEVELOPMENT16 External Environment Analysis - PEST analysis16 Internal Environment Analysis18 STRATEGIC SELECTION19…

Words 6958 - Pages 28

United Arab of Emirates Country Notebook Essay

emirates, which are: Abu Dhabi, Dubai, Sharjah, Ras Al-Khaimah, Ajman, Umm Al-Qaiwain, and Fujairah. They were united as a federal state on 2 December 1971 and formed the so called “United Arab Emirates”. Before the discovery of oil and establishment of the oil economy in the early 1960s, two main orientations shaped traditional local culture: the nomadic…

Words 18853 - Pages 76

Globalization and Its Impact on Marketing Strategies Essay

firms, both in developed and emerging economies. This dissertation mainly focus on two questions, first is does globalization affect firm performance? And second is the relationship between global market opportunities and performance stronger than the relationship between global market threats and performance? By answering these questions, the study indicates the extent to which firms in two different economic contexts are affected by globalization. It also shows which dimension of…

Words 5002 - Pages 21

Baskin Robbins Marketing Plan Outline Paper

with 2,800 locations nationally and 5,800 stores globally. What began as a small business opportunity has grown into a solid business model for existing and future franchise business owners. Despite, by these two ice cream enthusiasts, whose passion leads to the creation of more than 1,000 ice creams flavors, and with a variety of delicious treats, such as nutty…

Words 14987 - Pages 60