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

Oil prices hit two-year highs

Extracts from this document...

Introduction

Commentary #: 2 Name: Ana Merino Class: 11 St. Date: February 10th 2003 Word Count: 417 Title of Article: Oil prices hit two-year highs Source: BBC News Online 7/02/2003 Section of Syllabus: 1.2 Resource Allocation in the Market Commentary With the imminent attack on Iraq and the strikes in Venezuela, price of oil has gone up drastically. In these past months the price of oil has gone up due to various causes. One of the reasons is because of the cold winter in the US, stocks of heating oil and gasoline are falling heavily and fuel distributors are beginning to store supplies ahead of a possible war. ...read more.

Middle

Venezuela, the fifth largest oil exporter has undergone important strikes which have interrupted production and therefore the exports (the US imports 13% of its oil from Venezuela). The supply, which in economic terms is defined as the quantity of goods that sellers are prepared to sell at any given price over a period of time, has decreased in these few months because of the reasons mentioned above, this has caused the price of oil to increase. This can be seen in the graph below, as there has been less supply of oil, the supply curve has shifted to the left causing the price to go up from P1 to P2. ...read more.

Conclusion

In conclusion, this increase of the price in oil mainly because of the fear of war with Iraq will cause serious problems in the worlds economy. This is because oil is the most important source of energy for industrialised countries most of which don't have their own supplies and have to import them. These high prices will increase the costs for companies and consumers and therefore will cut down the profits or extend losses. Many people have warned that military action will push up the price of oil and as we can see, even before the military action has taken place, the price of oil is already rising. Word Count: 417 1 www.bbc.co.uk 2 Quantity demanded is greater than quantity supplied. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics 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 GCSE Economy & Economics essays

  1. U.S. Oil Dependency

    Though we are the greatest country in the world, our natural resources are not many. Needing oil, we look to the outside sources to get what we need, creating our reliance on other countries. The demand for oil is predicted to be one hundred and twelve million barrels per day by the year 2020.

  2. economics oil prices

    � An increase in demand causes the demand curve to shift to the right, for example China's new demand. The new demand curve has caused price to rise substantially, the QD has risen also. This increased demand will cause to put pressure on the dwindling oil supplies and the need to find an alternative.

  1. Economics Coursework: The Price Mechanism - House prices.

    the price: The leftward shift in demand increases the price from P to P1 this extension in the market means the quantity rises from Q to Q1. If interests are high then the opposite will happen. The shift is to the right and this drops the price to P1 and

  2. How to predict house prices.

    This highlights the importance of interest rates in regards to demand for housing. Slow economic growth and weak financial markets, has meant interest rates will unlikely move significantly upwards from their twenty-five year lows in order to promote growth within the UK.

  1. An investigation into oil prices

    There is also a correlation between the demand for oil and economic growth because oil is an essential in every industry. So when an industry increases in size and wealth they will want to expand more to generate more profits, and to do so they would require more oil.

  2. world oil market

    Oil production was reduced by over 1.3m barrels per day by hurricane Katrina which is around 90% of production in the Gulf of Mexico (http://tonto.eia.doe.gov/oog/special/eia1_katrina_090105.html). Refining capacity was hit hard with around 2m barrels of refining capacity shut in or reduced, as a result 1m barrels a day of petrol

  1. An investigation into the causes of rising house prices in the UK.

    Such factors will be changes in real income, growth of GDP, population size and the costs of factors of production. I will take each factor and explain how it effects the price of houses. Average house prices over the last 5 years Year Average house price (�)

  2. Free essay

    Economic Commentary

    monetary policy, which consists in a raise in money supply and a decrease in interest rate, to increase AD and lower SRAS. This is a policy taken from the Neo-Keynesian macro-model that believes in interventionism and short run measures to prevent deflation.

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