• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The world oil market is a Homogenous Co-operative Oligopoly. A broad definition of an oligopoly is a monopoly of many.

Extracts from this document...


Name Class/ Teacher May 10, 2006 Oil Markets 1. All petroleum crude (oil) purchased or sold in the world is traded in three basic ways Spot Trading, Futures Market, and Contract arrangement. Spot transactions are on-the-spot agreements to buy or sell a single shipment at an agreed price. Since suppliers and buyers use these to bridge short-term gaps between supply and demand, spot market prices are good indicators of the supply and demand situation, rising prices indicating shortage and vice versa. There are spot markets for different products namely crude oil, heating oil, gasoline and so on, and for different regions such as Rotterdam, US Gulf, Singapore etc. Futures markets cover trades that are promises to sell and buy a consignment of oil of a specified quality, delivered at a specified place at an agreed upon price up to 18 months in the future. Very little, if any, oil changes hands physically in futures markets, these however, provide current prices and expected future trends and are more in the nature of financial transactions rather than physical trade in oil. The most important and active exchanges where such transactions take place are the New York Mercantile Exchange and the International Petroleum Exchange, London. ...read more.


Any disturbance in these conditions will lead to instability and markets will have to adjust to reach a new equilibrium point. The three scenarios in the oil market may be analysed as under: a. The Venezuelan Government persuades the OPEC to cut production quotas. Supply will reduce, but no change shall take place in the demand. The bold lines represent the demand and supply curves before the change. At equilibrium, a quantity Q1 sold at price P1. The decrease in supply, represented by the dotted supply line, is not matched by any decrease in demand. Therefore, the market will tend to find a new equilibrium represented by price P2 and quantity Q1 remaining same. In practical terms the demand may come down slightly as nations tighten their belts and the new price may be a little lower than P2 but not significantly so. b. The USA decides to build up its oil reserves. This scenario represents an increase in the demand for oil, not matched by any change in the supply position. Here the situation would be as represented by the following diagram. ...read more.


North Sea* 5,099 Angola 1,070 Argentina 726 Australia 465 Brazil 1,536 Canada 2,358 China 3,501 Colombia 532 Ecuador 490 Egypt 624 Gabon 238 India 669 Malaysia 748 Mexico 3362 Oman 781 Russia 8667 Syria 413 United States 5407 Other 5695 World ** 71741 (All production figures are in million barrels per year) * Consists of UK, Norway, Denmark, Netherlands and German offshore operations. ** OPEC Production is included. Appendix 3 The largest Exporters, Consumers and Importers of crude oil: Exporters Net oil exports Consumers Total oil consumption Importers Net oil imports 1. Saudi Arabia 8.73 1. United States 20.5 1. United States 11.8 2. Russia 6.67 2. China 6.5 2. Japan 5.3 3. Norway 2.91 3. Japan 5.4 3. China 2.9 4. Iran 2.55 4. Germany 2.6 4. Germany 2.5 5. Venezuela 2.36 5. Russia 2.6 5. South Korea 2.1 6. United Arab Emirates 2.33 6. India 2.3 6. France 2 7. Kuwait 2.2 7. Canada 2.3 7. Italy 1.7 8. Nigeria 2.19 8. Brazil 2.2 8. Spain 1.6 9. Mexico 1.8 9. South Korea 2.1 9. India 1.5 10. Algeria 1.68 10. France 2 10. Taiwan 1 11. Iraq 1.48 11. Mexico 2 12. Libya 1.34 13. Kazakhstan 1.06 14. Qatar 1. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays


    Not only goes to all of the stores but Deputy FSD's also has a look at designated warehouses once a month just to make sure everything is going well, he talks to all the colleagues in the factories and listens to all the problems or any queries they have.

  2. Motivation at Pizza hut 9.1

    provide some sort of service to its customers, this is because the way a service is put across has a huge impact on the buyer. Once customers are satisfied with the service they are receiving they obviously give a good review to the business.

  1. For this assignment I have been asked to produce a new marketing strategy for ...

    Strategic factors other than relative market share may affect profit margins. ? The growth-share matrix is based on the assumption that high rates of growth use large cash resources and that maturity of the life cycle brings about the expected profit returns.

  2. business planning unit 8

    Were as the rest 30% said that yes they would try the product this shows that there will be people wanting to try out the product. One of the good things about it was that no one stated that they wouldn't try the product; this simply means my product is

  1. Marketing Research

    Ordinal scale: ordinal scale variables are ones, which have a meaningful order to them. E.g. : A typical marketing variable is ranks given to brands by respondents. These ranks are not interchangeable, as nominal scale labels are. This is because rank 1 is higher then rank 2 and so on.

  2. unit 2 recruitment in the work place

    After some timing the when the business has come to a decision where they made a choice on who to select the next process it to send out a letter telling them they got the job. The letter will contain; some sort of congrats, it will tell them they have

  1. Business studies, product development

    Because of the question before I then decided that I should find out whether they wanted the bag on the outside to be able to change depending on the sports that they are going to partake in. The question I used was "Would you like to be able to change the bag on the outside for different equipment?

  2. This is a report on the international dimension of Costa Coffee and Coffee Aroma.

    So this way Costa is closer to their consumers and consumers will satisfied with Costa and they will gain brand loyalty. 4. Target Market: Costa Coffee strives to appeal to all ages. Young and Mature, all consumers are bound to be satisfied by their array of choices.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work