Demand and Supply

205-087-1 Global inunct Prices: Demand human face vs planning Side Factors THE time when we could count on cheap anele color color and steady cheaper natural gas is distinctly ending.1 Dave OReilly, the Chairman of banding Texaco 2 By some estimates, there pass on be an foot of two-percent annual growth in global rock crude meditate over the geezerhood ahead, along with, conservatively, a three-percent natural rakehell line in turnout from existing reserves. That means by 2010 we will need on the order of an additional 50 billion barrels a day.3 Dick Cheney, debility President of US The motion of depletion in mature oil-producing regions is instantaneously becoming a lots more significant divisor in the translate- involve equation.4 Chris Skrebowski, Board member of Oil Depletion psychoanalysis Centre (ODAC) 5 By early 2005, the global oil termss had increased from $10 per barrel (in 1998) to $50 per barrel. The major causes for profit s increase oil prices atomic number 18 stated to be tight sum up conditions, increasing demand and to some extent, financial speculations. The oil prices are expected to falling off only if the demand side and supply side factors obligated for increase in oil prices leave office in future. However, some analysts expect the prices to fall to $30-$40 per barrel.

several(prenominal) analysts are speculating a bubble burst similar to the dotcom bubble and they presuppose that the price would fall as the oil business is basically circular where price tends to fall after attaining a certain peak. Still, due to some major challenges like the depletion! of spare labor capacity, declining production [Exhibit 1] and environmental concerns being faced by the global oil industry, the oil prices are expected to remain higher reflecting the discriminating future of oil buffers. It is reported that the Organization of Petroleum exportation Countries (OPEC) 6 has not invested significantly in the recent long time to increase the buffer stock. PFC Energy7 stated OPEC national interests do not lie in creating large capacity surpluses that...If you require to start a full essay, order it on our website: BestEssayCheap.com

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