Demand and Supply

205-087-1 Global inunct Prices: Demand human face vs put up Side Factors THE time when we could count on cheap petroleum 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 idle of two-percent annual growth in global anele determine over the geezerhood ahead, along with, conservatively, a three-percent natural beginning 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, frailty President of US The motion of depletion in mature oil-producing regions is nowadays becoming a lots more significant agent in the translate- learn equation.4 Chris Skrebowski, Board member of Oil Depletion psychoanalysis Centre (ODAC) 5 By early 2005, the global oil values had increased from $10 per barrel (in 1998) to $50 per barrel. The major causes for profit increase oil prices atomic number 18 declared to be tight sum up conditions, increasing demand and to some extent, financial speculations. The oil prices are expected to shine only if the demand side and supply side factors trustworthy 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 rotary where price tends to fall after attaining a certain peak. Still, repayable to some major challenges like the depletion of spare mathematical product 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 lancinating future of oil buffers. It is reported that the Organization of Petroleum exportation Countries (OPEC) 6 has not invested sig nificantly in the recent days to increase t! he buffer stock. PFC Energy7 stated OPEC national interests do not lie in creating large capacity surpluses that...If you lack to start a full essay, order it on our website: BestEssayCheap.com

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