oil in the market

Topics: Petroleum, Oil reserves, Saudi Arabia Pages: 3 (513 words) Published: June 15, 2014
Oil in the Market
The following article covers the topic of oil as a commodity traded in the market of international petroleum exchange. The market for oil is a perfect example, when it comes to supply and demand factors, seeing as it is a commodity most nations are dependent on. Here is a list of the world’s largest consumers of oil

 
Consumption of oil in 2005
Thousand barrels daily
Share of total consumption %
USA
20655
24.6%
China
6988
8.5%
Japan
5360
6.4%
Russian Federation
2753
3.4%
Germany
2586
3.2%
India
2485
3.0%
South Korea
2308
2.7%
Canada
2241
2.6%
France
1961
2.4%
Mexico
1978
2.3%
Saudi Arabia
1891
2.3%
Italy
1809
2.2%
Brazil
1819
2.2%
United Kingdom
1790
2.2%
Spain
1618
2.1%

The demand for oil would have to be split into 4 subdivisions: - Cyclical
- Prices of substitutions
- Changes in climate
- Market speculation

One of the keys to global economic growth would have to be oil, especially for a country to advance in the economic world. The demand for oil will be present a perfect example of this would have to be, the Chinese economy, with a surge in the demand for crude oil in china, their economy has risen tremendously. Since oil is limited. People must look for other alternatives like solar power, hydro power, even alternatives like ethanol where it is used effently as a source of energy to power vehicles. When it comes to the market speculation there is a lot of investment being poured into the oil trade, due to this surge of investments, fluctuations in the market go from high to low on a daily basis. Risk will be present when it comes to business, but in the case of the investors depending on how the market trends are they may lose profit rather then make profit.

When it comes to the supply of oil there are long and short-term factors that affect the international markets. The short-term factors include: -Profit motive
-Spare capacity
-Stock
-External shocks...
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