Crude oil is a strategic product, in the sense that it is a most necessary fuel for all industries of nations in the world. While crude oil is a most strategy input for productions, transportations, and national defends, whoever have control over this source of energy will dominate over other countries, so in addition to supply and demand factors that affect the price, consumers must pay attention to the producers and export countries that can use this product as a weapon. Such as during and after the 1973 Arab-Israeli War, the oil giant Saudi Arab, members of the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo against the United States and other Western European countries, which including the Netherlands, Portugal, …show more content…
The embargo both banned petroleum exports to the targeted nations and reduced in oil production. So regardless of profit or loss factors of production, which does not affect in the short term, when oil prices was more than double (50 dollars) will cause the importing countries suffer from economic recession. If we look under the long term, we may wonders that to what extent the oil prices can rise and fall. Indeed, in the past crude oil prices fell below 20 dollars a barrel and then rising up to nearly 140 dollars a barrel as we have seen in the middle 2008. When looking in the long term, we may wonder where the peak and the trough of crude oil price is.
One year ago, as of January 2015, the world seems happy and relieved when crude
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The WTI is described as light because of its relatively low density, and sweet because of its low sulfur content (Cite source). The WTI is the underlying commodity of New York Mercantile Exchange 's (NYMEX) oil futures contracts. If we calculated using the current buying power of U.S dollar, i.e. after eliminating the effects of inflation in the past 45 years, from 1970 to 2015, according to the NYMEX, the crude oil price of WTI has moved from 15 to 120 dollars a barrel (Cite source). When recalling the oil prices in the past to predict for the future, we have seen a lot of vicissitudes phrases. From 1974 to 1985, oil prices moved within a range of 50 to 120 dollars per barrel. From 1986 to 2004, for almost 20 years, oil prices range between 20 to 50 dollars per barrel. There are two exceptions for that time frame, however, when the crude oil price raised above 50 dollars ceiling or fall below 20 dollar floor is when Iraq attacked Kuwait in 1990 and when the Russian Federation devaluation its currency in 1998 due to the effect of the economic crisis from the East Asia in 1997. Later, from 2005 to June 2015, oil prices returned to the 1974-1985 range, which is between 50 and 120 dollars
On January 10th 1901 the discovery of oil at Spindletop would lead to the greatest economy boom the world has ever encountered. The amount of oil that would be discovered across Texas would be more than enough to power America through the next several decades. The effects of having oil would completely change Texas culture, lifestyle, and business tremendously. In the book of Oil In Texas, will prove that America would change completely from agriculture nation to an industrial nation after the discovery of oil in Texas.
Energy Crisis (1970’s) states that the crisis officially began when the “Organization of Arab Petroleum Exporting Countries (OAPEC) reduced their petroleum production and proclaimed an embargo on oil shipments to the United States and the Netherlands, the main supporters of Israel.” They did this because of the United States providing support to Israel during the Yom Kippur War (Energy Crisis (1970’s)). Although it “ended in late October, the embargo and limitations on oil production continued, sparking an international energy crisis” (Energy Crisis (1970’s)). The United States presumed that a boycott would damage the Persian Gulf financially, however, because of the rise in the price of oil, it actually helped them (Energy Crisis (1970’s)). The price of oil actually shot from $3 a barrel to $12 a barrel. (Energy Crisis (1970’s)). This produced tremendous lines at gas stations, exorbitant gas prices, and people were told not to put up Christmas lights. Other countries that were affected could only heat one room in the winter (Energy Crisis (1970’s)). The American auto manufactures were injured as well while they were turning out large vehicles, whereas Japanese manufacturers produced tiny fuel- efficient autos (Energy Crisis (1970’s)).
The risk associated with these countries being the top oil producers is twofold. One, they are located half way around the world, making it expensive to transport the product logistically to a desired destination. And two, the U.S. has weak, if not contentious, relationships with them. The risks continue to mount, as America imported over 58% of its imported petroleum in 2013 from the Persian Gulf and OPEC. The players in OPEC are known globally to be hostile actors who do not have the best interest of any Western country....
In today's global economy, energy is one of the most crucial and sought after commodities. Who supplies it and how much they supply determines how much influence they have over other countries as well as the global economy. This is why hydraulic fracturing is currently such an important and controversial topic in the United States. Hydraulic fracturing, more commonly known as "fracking" or hydrofracturing, is the process of using pressurized liquids to fracture rocks and release hydrocarbons such as shale gas, which burns more efficiently than coal. This booming process of energy production provides a much needed economic boost, creating jobs and providing gas energy for Americans. The efficiently burning shale gas reduces carbon emission from electricity production plants, reducing carbon footprints on the environment. However, the process of hydraulic fracturing uses millions of gallons of pressurized liquid, which contains toxic chemicals, and some of this water is left over undealt with. The air near fracking sites is often also polluted and unsafe for nearby community residents. Injecting millions of gallons of water laced with toxic chemicals into the rock thousands of feet deep can cause earthquakes, causing a safety hazards for all nearby areas. Hydraulic Fracturing makes rare natural gases easily attainable, boosting the economy and reducing carbon emissions. However, the negative side effects such as contaminated water and air, make hydraulic fracturing a process that may not be worth the benefits.
The U.S federal government should significantly increase fracking because oil and gas fracking is big business in America, with more than two million hydraulically fractured wells across the country producing 43 and 67 percent of our national oil and gas outputs, respectively. But in my opinion these wells also nearly played a secondary role as nuclear waste storage sites and had the Atomic Energy Commission had its way with Project Plowshare. And fracking is the process of pumping water deep into the Earth, specifically into underground oil and gas reserves, at tremendous pressures in order to break apart the surrounding rock and free the energy product, which can then be pumped out and used. However in the mid 1950s, scientists from the Atomic Energy Commission and officials from the U.S. Bureau of Mines did begin experimenting with an alternative method of fracking, one that employed nuclear bombs more powerful than anything we dropped on the Japanese.
In 2004, crude oil producers around the world expected a 1.5% growth in the world’s demand for crude oil. The actual growth rate was more than double the projections at 3.3%. This growth was due to rapidly industrializing of foreign countries such as, China and India. Therefore the lack of crude oil affected the supply of gasoline to consumers at the pump.
The Opinion part of the article is mainly about how fracking can be safe and also can bring big benefits to the United States if done with care. Fracking is the practice of cracking open underground oil and gas formations with water, sand and chemicals. Fracking has its pros and cons. For example, fracking can contaminate vital amounts of drinking water supplies if not careful. The EPA’s states, “Yes, there were instances of contaminated drinking water wells, but there was no evidence of “widespread systemic” harm, and the number of problems that did occur was small compared to the number of (fracked) wells.” Fracking can be safe with careful oversight. Fracking accounts for 56 percent of U.S Natural gas production and 48 percent of oil output,
For the Canadian citizens, it is a good thing because low cost of oil equals low price for gas, therefore the people of this country will have extra money in their pockets: “typical consumers will be saving an average of $25 a week, or $300 in three months” says Elna Cain in her article titled Why Are Gas Prices Low And What Does It Mean For Canadians. That being said, other businesses can benefit from the extra amount of cash. In other words, the beneficiaries of this decline in oil prices are not only the citizens, but other business owners as well. The reason why oil prices fluctuate is because of the law of supply and demand, which states that if the supply is low then the price will be high and if the demand is low then the price will be significantly low, which is the case for gas today.
Aside from causing a major shift in geopolitical power, WWII also solidified the integral role oil played politically in national security. However, following the war the United States was no longer the world’s largest oil producer and was unable to maintain self-sufficiency as it had in the past. As a national security imperative oil was more important at this point than ever before. America’s war machine needed to be well oiled in case the new Cold War suddenly turned hot.
The U.S dependency on foreign oil presents many negative impacts on the nation’s economy. The cost for crude oil represents about 36% of the U.S balance of payment deficit. (Wright, R. T., & Boorse, D. F. 2011). This does not affect directly the price of gas being paid by consumers, but the money paid circulates in the country’s economy and affects areas such as; the job market and production facilities. (Wright, R. T., & Boorse, D. F. 2011). In addition to the rise in prices, another negative aspect of the U.S dependency on foreign crude oil is the risk of supply disruptions caused by political instability of the Middle East. According to Rebecca Lefton and Daniel J. Weiss in the Article “Oil Dependence Is a Dangerous Habit” in 2010, the U.S imported 4 million barrels of oil a day or 1.5 billion barrels per year from “dangerous or unstable” countries. The prices in which these barrels are being purchased at are still very high, and often lead to conflict between the U.S and Middle Eastern countries. Lefton and Weiss also add that the U.S reliance on oil from countries ...
The recent presidential elections have highlighted international policies, and the support or disapproval of government action overseas, such as the Iraq war. As supportment over the Iraq war has led to questions over United States involvement in the Middle East. Americans today tend to strongly believe on one stance or another, however there is indecisiveness over the more recent question if the United States should remain in the Middle East, especially when it comes to the issues of geopolitics, radical organizations, and an in-depth look at current United States policies. When it comes to the topic of the Middle East, most economists would agree that oil has been a central focus of United States affairs. This is in part due to the dependence
5 Natural Oil Benefits Essentials oils have sparked a lot of curiosity among people that are interested in alternative methods to heal or just feel good about their body. Certain essential oils are associated with beauty and skin care too. They are popular ingredients in soaps, crèmes, lotions, shampoo, conditioners, ointments, and beauty oils. Many large manufacturers of health and beauty products are now adding essential oil ingredients to their line of products to encourage more people to buy their products.
In conclusion, OPEC's monopoly of the petroleum industry has been a strong one since the 1960's since its members enjoy economies of scale. Its decisions concerning the output of petrol have always been strong affecting the rest of the world. This monopoly is socially inefficient due to the output and the deadweight loss that results. Interestingly enough, to break this monopoly, the new Iraq has the potential to turn the market power around.
Many factors determine the supply and demand of oil in the short-term and long-term range. First, conflicts that occur in the world influence the supply and demand of oil. For instance, the onset of the United States of America Civil War brought about a surge in prices and demands of oil. It amplified the effects on the oil market by the cut-off of supplies of turpentine from the South and the introduction of a tax on alcohol, which rose from 20¢/gallon in 1862 to $2/gallon by 1865, in contrast to the 10¢/gallon tax on products derived from petroleum. Assuming a yield of about 20 gallons of oil per barrel of crude, each 10¢/gallon tax disparity on petroleum product cost of two dollars per barrel, which was a competitive advantage for oil. Because of this, the tax eliminated alcohol as a competitor to petroleum. As a result, oil production declined after 1862, even as new demand pressures grew. Other conflicts that affected the supply and demand of oil include the OPEC embargo that happened between 1973 and 1974, when Syria and Egypt attacked Israel. Others are the Iraq-Iran war between 1981 and 1986, the first P...
The worst imaginable environmental catastrophe that could occur in Maryland has just become a reality. The lifeblood of Southern Maryland's Watermen has been forever affected. The ecosystems of the Patuxtent River and Chesapeake Bay have been irreversibly contaminated. The Three Mile Island and Chernobyl Nuclear Accidents have affected the world ecosystems; but the Chalk Point oil spill has reached us here in Southern Maryland. The ethical considerations with generating electricity from fossil fuels, specifically oil, has a profound impact on us all. We all use electricity to make our lives easier and more productive. By using this electricity have we given our permission for the oil companies free reign in order to provide us with the service we demand?? Are we just as responsible for the oil spill as the corporate leaders who run the companies? As citizens we are in a position to develop and enforce regulations to protect ourselves. Do we also protect the environment; or is the environment just something for us to use? These and many other moral dilemmas exist for modern man.