Oil Price Hike Essays

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Effect of Oil Prices on Inflation in Kenya

...economic variables such as inflation. Oil and other petroleum products are scarce commodities in the world. Like prices of other commodities the price of crude oil experiences wide price swings in times of shortage or oversupply. The crude oil price cycle may extend over several years responding to changes in demand as well as OPEC and non-OPEC supply. Throughout much of the twentieth century, the price of U.S. petroleum was heavily regulated through production or price controls. In the post World War II era, U.S. oil prices at the wellhead averaged $28.52 per barrel adjusted for inflation to 2010 dollars. In the absence of price controls, the U.S. price would have tracked the world price averaging near $30.54. Over the same post war period, the median for the domestic and the adjusted world price of crude oil was $20.53 in 2010 prices. Adjusted for inflation, from 1947 to 2010 oil prices only exceeded $20.53 per barrel 50 percent of the time. (See note in the box on right.) Until March 28, 2000 when OPEC adopted the $22-$28 price band for the OPEC basket of crude, real oil prices only exceeded $30.00 per barrel in response to war or conflict in the Middle East. With limited spare production capacity, OPEC abandoned its price band in 2005 and was powerless to stem a surge in oil prices, which was reminiscent of the late 1970s. Crude Oil Prices 1947 - October 2011 SOURCE: WTRG ECONOMICS World Price - The only very long term price series that exists is the U.S.......

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Predictive Valuation of Oil in the Philippines

...“The Predictive Valuation of Value of Oil Imports in the Philippines” A Research Study Presented to: Dr. Marcelo M. Angelia, Ph.D In Partial Fulfilment Of the Requirements for the Subject DGM 234 Empirical Analysis I By Marl Tutor Ale April 08, 2012 Table of Contents Chapter Page 1 The Problem Introduction. . . . . . . . . . . . . 1 Conceptual Framework. . . . . . . . . 2 Schematic Diagram. . . . . . . . . . . 2 Statement of the Problem. . . . . . . . . 5 Null Hypothesis. . . . . . . . . . . . 6 Significance of the Study. . . . . . . . . . 7 2 Findings and Analysis. . . . . . . 8 3 Conclusion and Recommendation . . . . . . . 15 References . . . . . . . . . . . . . . . . . 16 Appendices. . . . . . . . . ...

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Oil Prices

...Oil Prices and the U.S Trade Deficit Along with the financial industry, chemical industry and entertainment industry, the energy industry is one of the top markets in the United States with oil production as one of its core essentials. Since the beginning of 2002, oil prices have almost quadrupled overtime. The United States is estimated to be the number one country of oil consumption therefore making the soaring prices one of the major concerns within the country. Although the amount of U.S imports and exports have varied overtime, recently the U.S has been running trade deficits. With the price of oil increasing, an oil-importing country like the U.S will have a substantial increase in the cost of petroleum imports therefore suggesting the deterioration of their trading deficit will be even greater. In this study, Michele Cavallo examines the changes of oil prices and how they affect a number of different factors. These factors include the slow-paced growth in oil production creating has an increase in demand which has outpaced the increase in supply. Cavallo explores the relationship between the surge in oil prices and trade, how the U.S trade deficit evolves in response to higher oil prices and furthermore creates a model that helps explain how the import of oil, despite the increase in price, remained constant and what affect it has on the trade deficit. Using data from January 2002 to July 2006 for overall trade balance and the petroleum trade balance,......

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Oil and Gas Prices

...Oil and Gas 2 There 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 as India and China; the extra demand for oil has put enormous pressure on available oil reserves. The Energy Information Administration stated, “If refinery or pipeline and/or reductions in imports cause supplies to decline unexpectedly, gasoline inventories (stocks) may drop rapidly. This may cause wholesalers to bid higher for available supply over concern that future supplies may not be adequate” (Energy Information Administration, 2008, para. 9). With this in mind, the other underlying factors that affect supply are disruption to supply or threat of disruption to supply along with The Organization of Petroleum Exporting Countries (OPEC). The Organization of Petroleum Exporting Countries is an organization of oil producing countries which produces over 40% of the world’s crude oil and has two-thirds of the world’s oil reserves. This organization was formed in 1960 to regulate the supply of oil and to some extent, the price of oil. The organization includes Algeria,......

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The Price Hike in Petroleum

...The price of petroleum as quoted in news in North America generally refers to the WTI Cushing Crude Oil Spot Price West Texas Intermediate (WTI), also known as Texas Light Sweet, is a type of crude oil used as a benchmark in oil pricing and the underlying commodity of New York Mercantile Exchange's oil futures contracts. WTI is a light crude oil, lighter than Brent Crude oil. It contains about 0.24% sulfur, rating it a sweet crude, sweeter than Brent. Its properties and production site make it ideal for being refined in the United States, mostly in the Midwest and Gulf Coast regions. WTI has an API gravity of around 39.6 (specific gravity approx. 0.827) per barrel (159 liters) of either WTI/light crude as traded on the New York Mercantile Exchange (NYMEX) for delivery at Cushing, Oklahoma, or of Brent as traded on the Intercontinental Exchange (ICE, into which the International Petroleum Exchange has been incorporated) for delivery at Sullom Voe. Cushing, Oklahoma, a major oil supply hub connecting oil suppliers to the Gulf Coast, has become the most significant trading hub for crude oil in North America. The price of a barrel of oil is highly dependent on both its grade, determined by factors such as its specific gravity or API and its sulphur content, and its location. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the imported refiner acquisition cost, the weighted average cost of all oil imported......

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How Crude Oil Price Affect Gas Prices

...How Crude Oil Prices Affect Gas Prices Crude oil prices make up 71% of the price of gasoline. The rest of what you pay at the pump depends on refinery and distribution costs, corporate profits, and Federal taxes. Usually, these costs remain stable, so that the daily change in the price of gasoline accurately reflects oil price fluctuations. (Source: EIA, FAQ, December 6, 2013) It usually takes about six weeks for oil price changes to work their way through the distribution system to the gas pump. Oil prices are a little more volatile than gas prices. This means oil prices might rise higher, and fall farther, than gas prices. Historical Oil and Gas Prices: Oil and gas prices have been especially volatile since the 2008 financial crash. Here's a look at their peaks and valleys, and what caused the price swings. * 2014 - Prices remained around $100/barrel. That's because the U.S. has plenty of shale oil. 2013 - Oil rose swiftly to $118.90/barrel on February 8, sending gas prices to $3.85 by February 25. Prices had started rising earlier than normal thanks to Iran's threatening war games near the Straits of Hormuz. What Causes High Oil Prices?: Like most of the things you buy, oil prices are affected by supply and demand. More demand, like the summer driving season, drives higher prices. There is usually less demand in the winter, since only the Northeast U.S. uses heating oil. However, oil prices are also affected by oil price futures, which are traded on the......

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Consumer Price Index

...Consumer Price Index EC 601 – Fall 2010 December 3, 2010 Consumer Price Index (CPI) According to Mankiw the Consumer Price Index is a measure of the overall cost of the goods and services bought by a typical consumer. The Department of Labor’s subordinate branch the Bureau of Labor who is in charge of providing the Consumer Price Index of states that the Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a “market basket” of consumer goods and services. Some background into how the Consumer Price Index came about. The Consumer Price Index was initiated during World War I, when rapid increases in prices, particularly in shipbuilding centers, made an index essential for calculating cost-of-living adjustments in wages ("United states consumer," n.d.). To provide appropriate weighting patterns for the index, so that it would reflect the relative importance of goods and services purchased in 92 industrial centers in 1917-1919("United states consumer," n.d.). Periodic collections of prices were started, and, in 1919, the Bureau of Labor Statistics began publication of separate indexes for 32 cities ("United states consumer," n.d.). Regular publication of a national index, the U.S. city average began in 1921, and indexes were estimated back to 1913 using records of food prices ("United states consumer," n.d.). Because people's buying habits had changed substantially, a new study was made covering......

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Effect of Oil Prices in Indian Stock Market

...LITERATURE REVIEW 6 GAP in Research 8 MOTIVATION 8 DATA COLLECTION/SAMPLE SELECTION 9 HYPOTHESIS 10 Research Methodology 10 FINDINGS 11 CONTRIBUTION TO LITERATURE 23 CONCLUSIONS 23 References 25 UNDERSTANDING ON RESEARCH PROBLEM IDENTIFICATION & DEFINITION Relationship between macroeconomic variables and broad market index: A causal relationship between Nifty CNX and macroeconomic variables in India ABSTRACT The relationship between macroeconomic variables and broad market index by now are well documented in the literature. However a void in the literature relates to examining the causal relationship between Nifty CNX and macroeconomic variables such as FDI, FPI, weighted average lending rate (WALR), GDP and oil import in India and correlation among the macro variables. INTRODUCTION Globalization of Indian economy post liberalization has been spurred by capital and stock investment in terms of FDI & FPI. Indian stock market both securities and commodities are among the favourite hunting spots for foreign investor betting on India’s growth story. Over the last two decades the fast space of economic growth and progressive policy liberalization has made India an attractive destination for World’s investors. FDI and FPI thus have become instruments of international economic integration and stimulation. Fast growing economies like Singapore, China, Korea have registered incredible growth at onset of FDI. Though US captures most of the FDI......

Words: 6806 - Pages: 28

Price of Oil

...INDEPTH: OIL The price of oil - in context CBC News Online | April 18, 2006 Oil is sold in barrels - it's the same unit of measure used to sell whisky. A barrel of oil - or whisky - contains 159 litres. The price of a barrel of oil has been testing new highs since it pushed through $50 a barrel in September 2004 - and pushed gasoline prices well beyond $1 a litre in the summer of 2005. But how high are prices like that, historically speaking? Turns out these records may not be records, after all. Oil prices were stable for most of the 100 years before 1973 at well under $5 a barrel. Expressed in today's dollars (all figures in U.S. dollars), the price was closer to $10 a barrel, hitting highs of about $15 and lows close to $8. Even as the world economy boomed in the decades following the Second World War, prices remained fairly stable. That's mainly because the United States held most of the clout in the oil industry - and the U.S. government regulated the price of oil. From 1958 to 1970, prices were stable at about $3 per barrel, but in real terms the price of crude oil declined from above $15 to below $12 per barrel. The decline in the price of crude when adjusted for inflation was further exacerbated in 1971 and 1972 by the weakness of the U.S. dollar. But by the early 1970s, that changed. The Organization of Petroleum Exporting Countries had become a force and in 1973, the first major oil shock hit the world as Arab nations refused to sell to countries......

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The Effects of Fare Hike in the Philippines

...Information about the Jeepney Fare Hike in the Philippines Beginning June 14, 2014. Jeepneys in the National Capital Region, Region 3, and Region 4 will be increasing the minimum fare from P8.00 to P8.50 for the first 4 kilometers. Every succeeding kilometer will cost from P1.40 to P1.50. On the first week of June, the Land Transportation Franchising and Regulatory Board (LTFRB) began distributing copies of the approved fare matrix to various public utility jeepneys (PUJs) operators and groups to prepare for the scheduled hike. Chairman Winston Ginez said operators and drivers should display the new matrix prominently in their jeepneys, otherwise they will not be allowed to charge passengers the new rates. “We strongly urge the commuting public to report drivers who fail to conspicuously display the new fare matrix,” Ginez added. Those who fail to do so also face fines from P5,000 to P15,000 based on a joint administrative order from the LTFRB, the Land Transportation Office and the Department of Transportation and Communication which kicks in June 19. The LTFRB handed out copies of the fare matrix at the Amoranto Sports Complex in Quezon City on Tuesday. Distribution will continue the whole day from June 4-5, until June 6 (Friday morning). Status of Jeepney in the Philippines Jeepney today will be replaced because they are getting old don’t have a good condition, they will be replaced by an e-jeepney called “The Comet”. The electric-powered jeepneys set to ply......

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Oil Price Hike

...PUJ versus AUV Rivalry of Development and Survival In and Out of the Road The Case of Transport Industry in Metro Manila Philippines Candy Lim Chiu, MBA, Kyoto University, Kyoto, Japan Hiromi Shioji, D. Econ, Kyoto University, Kyoto, Japan ABSTRACT The Public Utility Jeepney (PUJ) industry’s days are numbered despite the fact that it is an epitome of Philippine ingenuity on hybrid vehicle, cheap transportation, means of livelihood and employment generator that spans more than 50 years as the King of the Road. Its detour in the Philippine economy continue to be challenge by factors such as indirect government support, environmental issues, social demands, economic crisis, transport competition and entrance of substitution of Asian Utility Vehicle (AUV) that collide from all direction living the industry in jeopardy. This paper examines the similarities, differences and trends of transport business and industry in the Philippines concentrating to two major rival mode namely PUJ and AUV where it present diverse lessons to be shared for future studies of transportation business and industry around the globe. Ultimately, it aims to make recommendation on measures of ensuring a level of playing field between the players with the existence of substantial economic potential, industry improvement and concrete policy instrument. INTRODUCTION From downtown city of Metro Manila famously overcrowded public utility vehicles (PUV) headed by the legendary......

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Oil Prices

...OUTLINE Introduction A. What effects can produce oil prices increase? a. Brief history and evolution in oil markets b. Causes of the increment in oil prices B. Colombia on the two sides of oil prices rise effects c. Brief description of effects d. Brief history of petroleum industry Body I. International context a. Global situation of oil prices b. Volatility and Dutch disease II. Colombia Case c. analysis of effects in the macroeconomic view: inflation and currency appreciation Conclusion A. Which are the solutions to control the harmful effects of oil prices increase B. What strategies are implementing in Colombia to deal with the effects of oil prices increase. Thesis statement Since the 1970s the world hadn`t experienced an oil increase like the one that is happening these days where many countries are concerned about the effects that this phenomenon can bring to their economies. As an oil exporting country, Colombia has to deal with a lot of challenge in order to transform all the revenues from petroleum into benefits to their society. However there are some effects that can bring some instability to this small economy, especially the one that international markets create a speculative bubble which can end in the Dutch disease. ‘The Dutch disease is a major market failure originating in the existence of cheap and abundant natural or human resources that keep the currency of a country......

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The Effect of Celebrity Advertising in the Philippines

...Proposed title: The Effect of Celebrity Advertising in the Philippines Thesis Statement: Philippine Celebrities are very important factors in advertising nowadays because they serve as a very effective means in marketing. Problem (Background of the Proposal): A celebrity can be an actor or an actress who are usually seen in the television programs. Nowadays, many celebrities are now also commercial models and this phenomenon constitutes to the so-called “Celebrity Advertising”. Celebrities are now making a huge impact in advertisement in the Philippines. According to studies, consumers usually buy a product because of the celebrity endorser without knowing the factual effect of that certain commercial product. Specifications: • Must be able to clearly define Celebrity Advertising. • Must be able to show the effect of Celebrity Endorsing or Advertising in the Philippine commercial industry marketing. • Must be to give the different celebrity attributes on how to advertise a commercial product effectively. • Must be able to give the effect of being an endorser of a celebrity (celebrity income in a commercial). • Must be to relate brands, celebrities and consumers in the Philippines • Must be able to identify the risks involved and the celebrity arguments against celebrity advertising in the Philippines • Must be able to distinguish the impact of the brand endorsement by a celebrity on consumer behavior in the......

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The Effects of Oil Price Hike to the Consumers in the Philippines

...The Effects of Oil price Hike to the Consumers in the Philippines The 19th century oil became the big part of people’s life for the machinery and vehicles that people used for their daily living. Within a year, more than 1,500 oil companies had been chartered, and oil became the dominant fuel of the 20th century and is part of the different countries economy, and Philippines are one of the countries that have an independent fuel company that started in 1978. The Filipino owned company that offers fuel products ranging from automobile gasoline to industry lubricants and services such as storage and shipping. For Filipino, oil is very important why? Because of the company that just started, planning to be independent and to be one of the develop company all over the world. The possible negative effects of oil price hike in the Philippines are the steady increases in the price of fuel on the global market and because of the importance of fuel in the production, marketing, and especially to transportation of food products and the desire of every producer, consumers and to those people involve in using oil. And to that, it increases the price of fuels used for transportation and the oil to the market, then after too that it may also affects the price of foods that being sell to the market that have been undergo to a process transferring into different places. Lastly, the higher household energy bills can contribute to price oil price hike. Gas and electricity prices......

Words: 1088 - Pages: 5

The Effects of Oil Price Hike to the Consumers in the Philippines

...The Effects of Oil price Hike to the Consumers in the Philippines The 19th century oil became the big part of people’s life for the machinery and vehicles that people used for their daily living. Within a year, more than 1,500 oil companies had been chartered, and oil became the dominant fuel of the 20th century and is part of the different countries economy, and Philippines are one of the countries that have an independent fuel company that started in 1978. The Filipino owned company that offers fuel products ranging from automobile gasoline to industry lubricants and services such as storage and shipping. For Filipino, oil is very important why? Because of the company that just started, planning to be independent and to be one of the develop company all over the world. The possible negative effects of oil price hike in the Philippines are the steady increases in the price of fuel on the global market and because of the importance of fuel in the production, marketing, and especially to transportation of food products and the desire of every producer, consumers and to those people involve in using oil. And to that, it increases the price of fuels used for transportation and the oil to the market, then after too that it may also affects the price of foods that being sell to the market that have been undergo to a process transferring into different places. Lastly, the higher household energy bills can contribute to price oil price hike. Gas and electricity prices......

Words: 969 - Pages: 4

Oil Prices And Economic Growth Essay

From the middle of twentieth century, due to exceptional importance of the crude oil in the supply of the world's energy demands, it has become one of the major indicators of economic activities of the world. Even after the appearance of alternate forms of energy like solar power, water and wind, the importance of crude oil as the main source of energy still cannot be denied.

This sharp increase in the world oil prices and the volatile exchange rates are generally regarded as the factors of discouraging economic growth. Particularly, the very recent highs, recorded in the world oil market bring apprehension about possible slump in the economic growth in both developed and developing countries.

A large number of researchers proposed that exchange rate volatility and oil price fluctuations have considerable consequences on real economic activities. The impact of oil price fluctuation is expected to be different between in oil exporting and in oil importing countries. An oil price increase should be considered as bad news for oil importing countries and good news for oil exporting countries, while the reverse should be expected when the oil price decreases. Through demand and supply transmission mechanism, oil prices impacts the real economic activity. The supply side effects are associated with the fact that crude oil is a basic input to production, and an increase in oil price leads to a rise in production costs ultimately that result in firms’ lower output. Oil prices changes also entail demand-side effects on investment and consumption. Consumption is also affected indirectly through its positive relation with disposable income. Moreover, oil prices have an adverse impact on investment by increasing firms’ costs. On the other hand it is generally recognized that the depreciation of exchange rate would reduce imports and expand exports, while the appreciation of exchange rate would encourage imports and discourage exports. Especially a depreciation of the exchange rate leads to transfer of income from oil importing countries to exporting countries in the terms of trade.

Since 2003, oil prices increased continuously, even touched the peak of $137 per barrel in July 2008, but after that a declining trend was observed. After 1970s, many negative oil shocks hit the world economies. The first one was during 1973-74 caused by OPEC oil prohibition, and secondly in 1978-79 when the OPEC put restraints on its oil production. This rising trend in oil prices continued until mid 1980s, subsequently, Iraq-Iran war in early 1980s further shoot up the prices. However in 1986, when Saudi Arabia increased its crude oil production, oil price tend to decreased. In 1990s, Iraq-Kuwait war was a major factor of oil price increase but it was ended in a year because of Asian financial crisis. In 1999-2000 the OPEC again narrow its production leading to another price shock. The latest and last oil price shock was started in the year 2003 which continued till...

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Research and Evaluation: Fuel Oil Prices

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