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There exist specific factors that cause this sharp decline in the oil price (Menton, 2015).
The strength of the American dollar is a key driver for the steady decline of the oil prices. The current global market has been under tremendous competition with the United States dollar being a key determinant of majority of the things. With the strong US dollar, the average price and value of majority of the commodities fall. This has greatly affected crude oil, whose price has been constantly declining. With global prices of commodities quoted in reference to the dollar, the prices trend lower in the economic times where the dollar is strong (Menton, 2015). The U.S currency surge experienced in the second quarter of 2014 saw a culminated decline in major leading product and commodity indices.
negative impact Of OPEC Oil output in the US due to oil prices registering low price sales by the end of the year would be another contributing factor. The marginal oil barrel output derived from unconventional sources like shale would be highly affected by the existing low global prices of crude oil. Drilling of oil wells has been on a steady decline based on the high costs incurred and the constant low prices registered in the global market making the industry unprofitable (Menton, 2015).
There is a global oversupply of crude oil. The supply has exceeded the demand of the product with its 2015 oil production speculated at 9.35 M barrels per day. It also goes into history that the existing oil reserves and repositories increased to the highest numbers ever registered since 80 years ago. The commercial inventories of crude oil in the United States rose by a margin of 4.5M barrels compared to the registered levels of the previous week (Menton, 2015). The figures make it the highest level of crude oil inventories registered in the year 2015.
The existing nuclear deal with Iran is viewed as a major element that soils the oil prices further down in the United
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The author states that it is the interaction of the forces of demand and supply in a marketplace that determines the price of a product at any given time. Price is the quantity of payment or compensation given by one party to another in return for goods and services. This aggregate demand is the sum of demand for oil by all the countries.
Marginal concept gives real insight of the cost and benefit incurred from certain production or exploration. Strategies to conserve natural resources as opposed to destroying them requires thoughtful approach. For the case of crude oil strategies to conserve these resources are critical food for thought.
What is its operating cost per RPM? What is the difference between these two numbers? 4 4.Calculate the same numbers for US Airways. Why does Express do such worse? 5 5.Why will the merger benefit the firms? 6 6.Why do you think the FTC allowed the UA-CO merger but is blocking the AA-US merger?
Futures markets cover trades that are promises to sell and buy a consignment of oil of a specified quality, delivered at a specified place at an agreed upon price up to 18 months in the future. Very little, if any, oil changes hands physically in futures markets, these however, provide current prices and expected future trends and are more in the nature of financial transactions rather than physical trade in oil.
The present study is to find out the causes for the disproportionate escalation of the price of gasoline than the price per barrel of crude oil and its effects on consumers.
The aim of selecting any business research method is to give most useful information to the key decision-makers in a most practical and cost-effective way.
The prices of light, low-sulphur grades like American WTI and North Sea Brent grades have at times, risen much faster than those of so-called heavy crude grades that contain sulphur content. For Example, the price of Russian Urals Blend, a heavy grade has occasionally been almost 7 dollars lower per barrel than Brent.
The future expectations with respect to demand and supply for oil will influence prices. Supply and demand are balanced by responses to the current price movements where complexity in the evolution of underlying expectations is likely to influence prices in the
The demand for fuel is showing an increase in countries such as India, China and other growing economies. On the other hand due to long efforts in conservation and energy efficiency in the mature oil consumers the demand for the fuel in these