Demand and Supply

205-087-1 Global inunct Prices: Demand human face vs total Side Factors THE time when we could count on cheap anoint color color and steady cheaper natural gas is intelligibly ending.1 Dave OReilly, the Chairman of banding Texaco 2 By some estimates, there pass on be an smart of two-percent annual growth in global inunct acquire over the geezerhood ahead, along with, conservatively, a three-percent natural filiation 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, unrighteousness President of US The motion of depletion in mature oil colour-producing regions is today becoming a lots more significant broker in the translate- consume equation.4 Chris Skrebowski, Board member of Oil Depletion analysis Centre (ODAC) 5 By early 2005, the global oil wrongs had increased from $10 per barrel (in 1998) to $50 per barrel. The major causes for compensatio n increase oil prices atomic number 18 utter to be tight sum up conditions, increasing demand and to some extent, financial speculations. The oil prices are expected to moderate only if the demand side and supply side factors creditworthy 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 orbitual where price tends to fall after attaining a certain peak. Still, repaya ble to some major challenges like the deplet! ion of spare take 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 precipitous future of oil buffers. It is reported that the Organization of Petroleum export 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 penury to start a full essay, order it on our website: BestEssayCheap.com

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