Business & Economics-Oil-cause for price change in last 12 months?

1. Political instability: in the Middle East, for example, the fighting in Libya has reduced global oil production by about one million barrels per day.

2. Organization of Petroleum Exporting Countries: (OPEC) are boosting their output by a similar amount to make up for shortfalls caused by situations like the Libyan crisis.

3. US Dollar Value: the weaker the dollar, the higher the price goes up.

4. Speculation: on the commodities and currency markets

5. Oil reserves: including what is available in U.S. refineries and what is stored at the Strategic Petroleum Reserves, example Obama is suggesting to release some reserves to ease the current price rise.6. Increased demands: The emergence of high-output economies of China and India add to the demands on a finite oil supply.

Strength of currency, especially the U.S. Dollar which oil is traded in, and oil prices react to and reflect each other

World economic conditions with upturns, and downturns increase/decease demand, is reflected in price until supply is adjusted. Major industrial nations like the US emerging industrial nations like China and India, demand more oil as productively increases, less as the economy slows.

Oil prices itself can cause a swing in supply and demand when populations cut back on consumption, using less when prices are at point people are not willing, or cannot afford, to buy and consume as much.

Speculative investors will buy oil at low prices. That ultimately can give them the power to create an artificial shortage, or surplus, driving prices up or down

Environmental laws can restrict not only where drilling is allowed, but things like sulfur content can restrict which crude oil nations can use for processing and consumption.

Unrest in or near oil producing nations always cause higher prices. Uncertainly, speculation, and fear can drive stock, commodities prices up as much as increased demand does.

The motives are, in reality: improve in call for (somewhat contained in the perfect years, with the tremendous monetary improve in India and China), the oil manufacturers smaller ability to improve production (because oil is a finite source), and the actual incontrovertible actuality that many oil reserves are in countries like Nigeria, Iraq, etc, were production is oftentimes disrupted because of terrorism and conflict. often times there are also disruptions in oil provide at the same time as oil manufacturers are hit by ability of storms (do not forget that hurricane contained in the Mexico golfing?). The impacts are: larger prices of production in each marketplace that makes use of potential derived from oil, so assume extreme inflaction contained in the arriving years. countries would have their improve constrained by ability of the extreme value of oil, and eventual lack of it to satisfy each and each of the desires. ultimately countries would could locate different sources of potential.