Rising Oil Prices

College
Research Proposal
Miscellaneous
Pages 6 (1506 words)
Download 0
METHODS: Data gathering from current news as well as other research articles published by scholars relating to the issue of rising fuel prices. This paper will provide discussion of the causes and initial impacts of the rise of fuel in the world market and economy as well as on low-income households.

Introduction


Fuel prices have risen and affected every nation in the world since the early years of this decade. Nandia Mongia (2008) reports that crude oil prices have increased in the world market from 22 U.S. Dollars up to almost $90 U.S. Dollars per barrel. This affected the prices of petroleum products like diesel, kerosene, propane, and gasoline and hit lower-income households. Figure 1 shows the rising trend of oil products from 2000 up to 2006.
Mongia (2008) mentions five (5) reasons for the rising of oil prices: (1) increasing demands for oil in the world market, (2) reduction of buffers, (3) uncertain oil supply, (4) assumption in the global oil market, and (5) lack of investments on exploration and refining. Robert Hirsch et al. (2005) mentions the notion of oil peaking. They note as perceived by geologists, oil is a limited source found under the earth's crust and its production will soon reach its peak or maximum and from there production will decline. They also emphasize that oil peaking is not related with running out of oil but it only describes the maximum production rate of an oil reservoir when half of its oil is recovered. (Hirsh et al. ...
Download paper
Not exactly what you need?

Related papers

International Business - Inflation
However inflation in rest of the world is seeing with great skepticism. Many political leaders view it as a failure of the policies of the governments especially in developing countries. Inflation, especially food inflation is on rise on those countries therefore there inflation is now more defined in terms of political terms rather than in economic terms.…
Macroeconomics-oil prices
The dependence of the economy on oil has reduced considerably with the strengthening of the IT and services sectors. Although the rise in prices of oil has been large it has not been sudden and the economies of the major economic powers have adjusted to the change. The rise in oil prices will definitely result in an across the board change in prices and thus inflation rates will continue to be…
Rising Oil Prices
Fuel prices have risen and affected every nation in the world since the early years of this decade. Nandia Mongia (2008) reports that crude oil prices have increased in the world market from 22 U.S. Dollars up to almost $90 U.S. Dollars per barrel. This affected the prices of petroleum products like diesel, kerosene, propane, and gasoline and hit lower-income households. Figure 1 shows the rising…
The Cause and Effect of Rising Oil Prices
Industries are forced to scale back production to keep costs in line. Worldwide inflationary pressures push prices higher around the globe. These actions and reactions fundamentally change the way the world works, plays and lives. The necessity of oil drives prices at the margins and the resulting shock pushes consumers and industry to scale back use, limit the demand, and create alternatives for…
Why Are Oli Prices Growing?
In 1970's when the oil prices were up suddenly and sharply, the price change was attributed to short supply. Back then demand for oil didn't change much. But because of wars there were huge disruptions in supply. On the contrary, in the current situation oil prices aren't about supply. Although when in September 2007 crude oil prices crossed $80 a barrel, it was related to the issue of OPEC…
Oil Prices Essay
The oil market has highly inelastic demand and supply especially in the short run mainly because there are a few if any substitutes for it. Scientists have attempted tirelessly to create solar and CNG run cars and there has been an attempt to harness nuclear power at all levels of the industrial use.…
Oil and Business
International trade slowed, but still rose because of emerging economies, particularly China and India. However, trade has been affected by the recent hike in oil prices. Furthermore, the publication states that fuel products (oil) saw a relatively lower growth than in previous years, which was due to the high prices of oil in the world market. However, Organization of Petroleum Exporting…