Examine the Factors That Determine the Price of Oil in the Market. How and to What Extent Could Government Policies Affect Oil Prices?
An Economic Analysis of the
Current Oil Market & Prices
PREPARED BY: Teoh Chern Shi
ID NO: B0075JMJM1112
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SEMESTER: Semester one
LECTURER: Ellie Semsar
DATE: 20th February 2012
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* 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 other product 11 5.2.1 Substitutes 11 5.2.2 Complements 13 5.3 Income 13 5.4 Population 14 5.5 Preference 14 5.5.1 Seasonal changes 14 5.6 Future price expectations 15 6 Factors that determine Market Oil Supply 16 6.1 The price of main product 16 6.2 The price of other product 17 6.2.1 Substitutes 17 6.2.2 Complements 18 6.3 Prices of factors of production used to produce the product 18 6.4 Technology 19 6.5 Number of producers 19 6.6 Future price expectations 19 7 Conclusion 20 8 Bibliography 21
Figure 1: Current Oil Price (OilPrice, 2013) 5 Figure 2: Crude oil price from Feb 2012 to Feb 2013 (OilPrice, 2013) 5 Figure 3 Historical Oil Prices Chart for 10 Years 6 Figure 4: Demand and Supply curve 7 Figure 5 Top ten net oil importers 2011 (EKKA, 2012) 8 Figure 6: Inelasticity in demand to price changes 9 Figure 7: Demand curve movement up along 10 Figure 8: Demand curve movement down along 11 Figure 9 Demand Curve shift rightward 12 Figure 10: Demand Curve shift leftward 12 Figure 11: Supply curve movement up along 16 Figure 12: Supply curve movement down along 17 Figure 13 Supply Curve shift leftward 17 Figure 14 Supply Curve shift rightward 18
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 other product 11 5.2.1 Substitutes 11 5.2.2 Complements 13 5.3 Income 13 5.4 Population 14 5.5 Preference 14 5.5.1 Seasonal changes 14 5.6 Future price expectations 15 6 Factors that determine Market Oil Supply 16 6.1 The price of main product 16 6.2 The price of other product 17 6.2.1 Substitutes 17 6.2.2 Complements 18 6.3 Prices of factors of production used to produce the product 18 6.4 Technology 19 6.5 Number of producers 19 6.6 Future price expectations 19 7 Conclusion 20 8 Bibliography 21
Figure 1: Current Oil Price (OilPrice, 2013) 5 Figure 2: Crude oil price from Feb 2012 to Feb 2013 (OilPrice, 2013) 5 Figure 3 Historical Oil Prices Chart for 10 Years 6 Figure 4: Demand and Supply curve 7 Figure 5 Top ten net oil importers 2011 (EKKA, 2012) 8 Figure 6: Inelasticity in demand to price changes 9 Figure 7: Demand curve movement up along 10 Figure 8: Demand curve movement down along 11 Figure 9 Demand Curve shift rightward 12 Figure 10: Demand Curve shift leftward 12 Figure 11: Supply curve movement up along 16 Figure 12: Supply curve movement down along 17 Figure 13 Supply Curve shift leftward 17 Figure 14 Supply Curve shift rightward 18
Bibliography: * Anderson, R. (2005, January). http://www.stlouisfed.org/publications/itv/articles/?id=1199. Retrieved from Federal reserve bank of St. Louis. * BP. (2012). http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9041228&contentId=7074736. Retrieved from BP. * Chevron. (2012, Apr). http://www.chevron.com/globalissues/energysupplydemand/. Retrieved from Chevron. * EKKA, A. P. (2012, Sept 4). POWERSECTORWORLD.BLOGSPOT.IN. Retrieved from http://powersectorworld.blogspot.co.uk/2012/09/energy-background-about-china.html. * Khodorkovsky, M. (n.d.). http://www.oilfuturesmarketfacts.com/insight-into-the-factors-controlling-defining.html. Retrieved from Oilfuturemarketfacts.com. * Lane, R. (2009). http://www.ehow.com/info_8621442_factors-demand-supply-oil-prices.html. Retrieved from eHow. * Mundi, I. (2012, January 1). http://www.indexmundi.com/g/r.aspx?v=91&t=10. Retrieved from Index Mundi. * OilPrice. (2013, Feb 13). Oil Price. Retrieved from http://oilprice.com/. * Taboola. (2013). http://www.bloomberg.com/energy/. Retrieved from Bloomberg. * Worldoils. (2012). http://www.worldoils.com/oilprice.php. Retrieved from Worldoils.