StudentShare solutions
Triangle menu

Oil price reaches record high of $100 barrel - Essay Example

Not dowloaded yet

Extract of sample
Oil price reaches record high of $100 barrel

The discussion then shifts to US perspective where in the price of the oil is determined to a great extent by the Americans. Nearly 25% of the world oil supplies are consumed by USA. The article concludes by stating that the price of the crude oil may go up to $200 per barrel in the coming years.
The demand in the output markets are determined by the households from the above diagram. A household's decision about what quantity of a particular product depends upon the following factors and all the factors are getting affected due to the price hike.
Other products include substitutes (Solar power, Electric Battery, Wind power etc.) and complementary goods (Cars and Automobiles etc.). Due to this price rise, the prices of these substitutes and complementary goods will remain affected. Substitutes, a favourable condition exists and for complementary goods, the condition worsens.
As per this graph, the pricing of oil is having an impact on producers and consumers. The producers/suppliers price the oil as per the law of supply in early 2000's where the oil market was a buyers market. The basis of pricing was cost of production of the least efficient marginal supplier.
As per this graph, the pricing of oil is having an impact on producers and consumers in the perspective of price hike. ...
4. The Prices of other products available in the market
Other products include substitutes (Solar power, Electric Battery, Wind power etc.) and complementary goods (Cars and Automobiles etc.). Due to this price rise, the prices of these substitutes and complementary goods will remain affected. Substitutes, a favourable condition exists and for complementary goods, the condition worsens.
5. The households' tastes and preferences will change.
6. The household's expectations about future income, wealth and prices also will change.

Ultimately, the law of demand - "As price rises, quantity demanded decreases and vice versa" will play a crucial role in decision making by the household's.



Graphical Analysis





World Price

80 10
Quantity (Barrels)
Oil Pricing before Price hike

As per this graph, the pricing of oil is having an impact on producers and consumers. The producers/suppliers price the oil as per the law of supply in early 2000's where the oil market was a buyers market. The basis of pricing was cost of production of the least efficient marginal supplier.





World Price

100 15
Quantity (Barrels)
Oil Pricing after Price hike


As per this graph, the pricing of oil is having an impact on producers and consumers in the perspective of price hike. The producers/suppliers price the oil on three major components where the oil market is now a sellers market. The basis of pricing is based on three components like Value of equivalent human energy, Sustainable energy creation costs, Affordability of the least ...Show more

Summary

The article is about the current price rise of crude oil to $100 per barrel and it forecasts the price of the oil using key determinants. The article discusses the law of supply and states the existing scenario of oil prices is an exception to the case. Then the article explains the transition of oil prices from Buyers market to Sellers market…
Author : cathyjones
Oil price reaches record high of $100 barrel essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Oil price reaches record high of $100 barrel"
with a personal 20% discount.
Grab the best paper

Related Essays

Oil/petrol price analysis
The price rose to US$50 in 2005 from under US$10 in late 1998 and early 1999. Oil prices hit a record high level of over US$145 a barrel in July 2008. With the onset of the worldwide financial crisis and deep recession, a reduced demand for crude oil drove down prices as it had done in the past, and the price of oil dropped to US$34 in February 2009, gradually increasing to US$80 in January 2010.
6 pages (1500 words) Essay
The High Price of Materialism
In particular, he asserts that the pursuit of materialism is more of a burden that results in individuals to forego more fulfilling acts. Hence, the desire for more possessions implies people working harder to purchase items, and since the possession does not bring happiness, they are distracted in trying to maintain the items.
5 pages (1250 words) Essay
Oil price
The major reasons put forward for this situation are the rising global demand for oil particularly in economies like China and India which are seeing rapid growth in their economies, the production of oil growing at a slower pace and the reserves of oil being depleted.
5 pages (1250 words) Essay
The oil Price crisis in Britain
This paper explores the various the manners and angles that have characterised the ways in which various media have reported or commented on the matter of the oil price crisis in Britain. There has been a notable pattern in the oil prices crisis reportage across various media to place the blame on Saudi Arabia which is the world's largest oil producer.
7 pages (1750 words) Essay
Oil Price Rise: A Literature Review of the Causes
Transportation got a boost with the advent of railways and airplanes. The world is totally different than what it was around 100 years back. The main reason behind this economic ride and development has been nothing but using fuels as a source of energy. The world moved itself from using wood to coal and finally to oil or better to say petroleum.
10 pages (2500 words) Essay
During the latter part of 2014 the oil price fell from well over $100 per barrel to around $50 per barrel. Why might this sudden fall have occurred and how will it affect economies around the world
the price setting business can be classified under two headings, one who represents a company and the other are the speculators whose main motives is to gain profits by regulating the oil prices. It was observed that the oil prices fell nearly to half of its rate. The main
8 pages (2000 words) Essay
Oil Price and Petrochemical Manufacturing in UAE

The paper tells that in 1998, Abu Dhabi National Oil Company (ADNOC) and Austria’s Borealis founded the company as a joint venture. The company is a chief provider of chemical and innovative plastics solutions. The company has its headquarters in Singapore. It has more than 3000 employees with more than 40 nationalities offering customer services to clients across the Middle East, Asia, and Africa.

2 pages (500 words) Essay
Oil price in GCC
Oils prices have shown a lot of fluctuations and volatility thereby causing massive uncertainty in the energy sector. The changes in the oil prices are directly
3 pages (750 words) Essay
Price drop of crude oil
According to the economist in the oil industry, a combination of factors has played a significant role in scaling down the prices of crude oil. Some of them include
2 pages (500 words) Essay
Effect Of Oil Price Change
The big question is how these changes in the prices of oil are forecasted in the market. The demand and supply framework in the market show the players to buy or sell at each given price. Equilibrium is achieved in the market if its demand is equal to its supply. The oil price at the market equilibrium is the market price of oil at that given time.
4 pages (1000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation