Economic Analysis

An of Investments by the crude oil IndustryIn 2004 , the realness merchandise of oil colour was estimated at tho over 29 .7 Bbl . The corresponding world consumption for oil during the same period was estimated at 29 .6 Bbl of oil , leaving a surplus of just under 0 .1 Bbl at the end of the family . In the United States , one of largest consumer markets for oil and oil products , from the low week in September 2004 to the first week in September 2005 , gasoline prices outgrowthd by a astonishing 1 .22 per gallon to 3 .12 before dropping to 2 .25 on November 21 , 2005 . These figures atomic number 18 quite staggering considering that contracts for crying(a) changed hands at 10 USD /barrel in 1999 . With the publication of China in the spherical market and its increasing enquire for oil , it is project that unless oil companies are able to increase the world proceeds by investing investment in oil and natural-gas production oil prices could increase exponentially over the next ten (10 ) geezerhoodPredicting the rate of increase and the actual prices that oil may reach in the next ten (10 ) years however is a more difficult task in that respect are many factors that must be considered such as alternative energy sources , investments in the oil industry , and of dividing line the political climate in the oil producing nations . This short(p) conference will attempt to shed light on this global issue by discussing the economics of oil and showing the factors which are relevant in predicting the prox of oil prices in resemblance to its hang on and demandTo arrive at a proper instinct of the economics of oil , it is first important to discuss the factors that run into the supply of oil on a global levelFactors touch on Supply of OilThe obvious factor in determine the supply of oil in the world is the amount of oil that elicit actually be extracted and processed .

Oil is essentially a non-renewable energy source and cannot be replenished once it has been extracted from the ground . The exercise of oil companies and countries is not in the actual production of oil but in it rationingA network of scientists called the Association for the Study of neb Oil and Gas (ASPO ) which is affiliated with a wide array of global institutions and universities studies the depletion rate of oil . ASPO studies concern themselves in determining the date and impact of the peak and decline of the world s production of oil and gas , due to resource constraints . The ASPO uses the Peak Oil Theory or the Hubbert Peak Theory which is a method of modeling known oil reserves and production rate and routinely used by oil companies to predict future yields of existing oil fields (Legget , 2005 . Using this model it has been projected that the world oil production growth trends , in the short term , have been decreasing over the last 18 months . Average yearly gains in world oil production from 1987 to...If you want to get a full essay, order it on our website: Ordercustompaper.com

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