Principles of Economics
Over the past few weeks we have discussed many different issues within the United States and across the nation. Many things that we use are items that we mostly need on a day-to-day basis. The price of gasoline is a demand that we need and with the price of gas continuing to climb, most Americans can just barely afford it. I will be discussing how OPEC sees the decline in oil.
OPEC, the Organization of Oil Exporting Countries is gradually changing. Their surveys show how the global market is shifting as oil production increases. They are mainly focusing on price, production, supply and demand. With the company calculating supply from non-OPEC producers they calculate global demand and as a result they calculate what’s left of the pie. Next year because of the supply independent producers - in particular the United States, but not only - is rising faster than demand. So, essentially that leaves less of the market for OPEC next year," said Richard Swan, editorial director for global oil news at Platts, a leading provider of information on energy, petrochemicals, metals and agriculture.
OPEC estimates that the demand of their oil next year will be around 29.6 million barrels a day. The most important thing for OPEC is the price of barrel of oil. The actual supply/ demand fundamentals are not great because they've got a boom in production going on coming out of the shale oil in the United States. With the sales going up so fast The incremental demand in the market is not great for OPEC but as long as the price per barrel is over a hundred dollars they would be fine.
Non-OPEC production is expected to significantly rise next year with an estimate of about 1.2 million barrels per day, with the US and Canada producing nearly all. The U. S. oil boom is due in large part to the hydraulic fracturing technique called fracking. The method is safe but it can poison drinking water. The U. S. has been at the forefront of fracking...
References: Voice of America News / FIND. (2013, July). OPEC Sees Oil Demand Decline Again Retrieved from http://elibrary.bigchalk.com
De Capua Report on OPEC / http://www.voanews.com/audio/Audio/305051.html
OPEC / http://www.opec.org/opec_web/en/publications/338.htm/ © 2013 Organization of the Petroleum Exporting Countries
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