Oil Price Rise

Better Essays
Why does oil prices rise and fall?
Of all industries in the world, oil industry is indeed an international business which affects most countries in the world. As the oil is the most consumed energy, it plays a vital role in daily lives as well as economy and social development. Also, the oil industry leads to new technology development both directly and indirectly. It has been deployed as a means for economy and political negotiation. Nevertheless, “crude oil” when refined into various petroleum products having different attributes i.e. gasoline, diesel, aviation fuel, kerosene, and fuel oil, and others, its value will be maximized. The price of crude oil is thus determined by the type and quality of the crude oil itself. Once distilled, heavy and light crude oil yield several refined products e.g. gasoline and diesel to serve demands at different quantities. In addition, sour and sweet crude are also priced differently.
Forecasting or estimating oil price in the future is sophisticated because oil is the commodity product which is available globally. Unlike other products, the quality of oil product can be made different to serve different needs of consumers. As the oil market is mainly regional activities which are born of cooperation from various countries and parties having different needs and environments, several factors then involve both directly and indirectly.
Nevertheless, the price can be analyzed at both regional and global levels.
Main factors that affect the price
1.Fundamental factor
The fundamental factor of oil price determination, is demand and supply like other type of products. Demand and supply of oil products change according to situation and circumstances. In any market situation, imbalance between demand and supply can affect prices. For instance, in the case of more demand than supply (undersupply), the price is likely to rise. The variables which result in imbalance between demand and supply include:
Economic growth

You May Also Find These Documents Helpful

  • Best Essays

    The Rise and Fall of Oil Prices POSC 101: Introduction to Politics & Government Professor Taehyun Nam December 6, 2012 Professor Taehyun Nam POSC 101 6 December 2012 The Rise and Fall of Oil Prices In the previous writing assignment, I wrote about how the high price of oil has affected my life as a commuting college student. Therefore, now I would like to explain the causes that contribute to the rise and fall of oil prices in the world economy. Oil is arguably one of the most…

    • 1299 Words
    • 6 Pages
    Best Essays
  • Better Essays

    The Rise and fall of Oil and Gas Prices 12/13/09 The U.S Benchmark sets the oil prices depending on the supply and demand. Gas and oil prices are rising and falling so much because of the number of investors, and the demand among the American people. The U.S. Benchmark sets the oil prices according to the supply and demand for oil, in a little town call Cushing, Oklahoma. The demand for oil this year had plunged twenty [Express numbers higher than nine in digits (when not…

    • 1656 Words
    • 7 Pages
    Better Essays
  • Better Essays

    Oil price

    • 1163 Words
    • 4 Pages

    Syria and Ukraine, oil prices increased significantly as did the profit earned by many oil companies including PETRONAS. Politicians in Malaysia opposed the government policy to oil price increase by twenty cents and the withdrawal of oil subsidy. As a manager or policy implementer, discuss the pros and cons if this policy in the context of the various theories of profit. Introduction The government of Malaysia increased the price of oil by 20 cents and withdrawal of the oil subsidy causing the…

    • 1163 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    Oil Price

    • 1914 Words
    • 8 Pages

    AND CONs OF INCREASING OIL PRICE 1. INTRODUCTION In this decade, the price of oil has been raised 3 times. The era of President SBY has the record of increasing oil price (premium). The policy was made by SBY has become pro and con between the expert of economic. Some people said that increasing the oil price is just can’t be done because it’s contra with UU, but government said that if we don’t raise the oil price it will absorb the APBN because the import oil price is higher and higher time…

    • 1914 Words
    • 8 Pages
    Powerful Essays
  • Better Essays

    Oil Price Analysis

    • 3265 Words
    • 9 Pages

    Oil Price Analysis: The Impact Of Supply & Demand By Greg McFarlane It’s easy to curse and moan when gas seems expensive. The oil companies are abusing the helpless customers who are effectively indentured to them, and can name their own prices thanks to a system of collusion and profiteering. Something, probably involving legislation, ought to be done. Except the truth lies elsewhere. In the long run, oil is about as purely elastic a commodity as there is, every movement on the production and consumption…

    • 3265 Words
    • 9 Pages
    Better Essays
  • Good Essays

    gas and oil prices

    • 987 Words
    • 3 Pages

    Oil and Gas PricesOil and Gas 2There are many issues that cause the cost of oil and gas to increase. The main contributing issue to the increasing cost of oil and gas is supply and demand, when demand is greater than supply, the price of oil and gas will increase. The factors that affect supply include increased demand, problems with refineries and pipelines, and disruption to supply or threat of disruption to supply.With the increased demand for oil in the United States and other countries such…

    • 987 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Price Rise in Nepal!!!!!

    • 276 Words
    • 2 Pages

    Price rise is the bane of modern world. Price of essential commodities go on rising every day despite the professed and genuine efforts of the government. The main reason of rising the price as the sky rocket is the im-maturity of the government plan and the unabated raise on the population at the alarming rate. As compared to china and other developed European countries most of the south Asian countries even India had failed miserably in controlling its population. In context of Nepal the…

    • 276 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Price Rise in India

    • 251 Words
    • 2 Pages

    Despite of continuous claims of curbing price rise making by the government, prices of commodities rose by more than 300 per cent in comparison with the per capita income in the past one year. The prices are soaring up more than the income in India. The middle class are being hit hardly with the price rise. According to a study, the prices of eight essential commodities such as wheat, pulses, tea, coffee, sugar, spices and non-vegetarian products has increased at an average of 19 percent in…

    • 251 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Cement Price Rise

    • 327 Words
    • 2 Pages

    Cement prices rise in North and Central India; Andhra Pradesh surprises positively After a damp August season, cement prices increased steadily in September. The month of October saw the trend continuing in most regions of the country. Surprisingly this phenomenon was witnessed in Andhra Pradesh as well which has been a not-so-profitable region for the cement makers. All India prices at Rs 299 per 50 kg bag, was up 1.7% on a month-on-month (mom) basis. The discipline in pricing among the cement…

    • 327 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Indian Price Rises

    • 702 Words
    • 3 Pages

    Rising Price in India wrote by : MILAN CHATERJEE ,india from : http://www.publishyourarticles.org/eng/articles/rising-price-in-india.html Today, India is facing many problems – the problem of corruption, the problem of unemployment, the problem of illiteracy, the problem of population, so on and so forth. The problem of rising prices is one of the most important problems that Indian is facing now. This problem is two-fold to check the rising prices and, if possible, to bring the prices down.…

    • 702 Words
    • 3 Pages
    Satisfactory Essays