Oil price rise dissertation

Three distinct arguments have been preferred by oil pundits to explain the crude oil phenomenon. According to the first, oil producers are supplying it at a rate that falls short of the rate at which demand for crude is growing. And the extraordinary growth in demand is being attributed to a group of nations, India and China included, which joined the band wagon of globalization and embarked upon mind boggling growth paths. The doctoral dissertation makes sure to evaluate speculation done by every economy in this topic.

The price of any commodity must rise in free markets when demands exceed supply, and it is no wonder, there fore, that the world is converging on to the middle east, pleading with it to raise crude oil supply. Whether the oil deprived destitute of the world will succeed in converting the rulers of the oil kingdoms to everlasting philanthropy is yet to be seen. The literature review would discuss the various reasons and its background.

The hard facts remains, though, that oil is one of the most exhaustible of resources in the world and to the best of our knowledge, the world’s fossil fuel reserve will be scarcer than fossilized dinosaurs by the middle of the century, unless the mankind hits upon alternative large scale energy sources in the near future.

This inescapable fact suggests that the organization of petroleum exporting countries will not be eager to oblige for too long. Demand supply arguments or what is more fashionable to these days to refer to as economic fundamentals suggest therefore that crude prices will not stabilize, except for very short intervals, unless demand slows down.

Let us move on then to the second reason that might explain the oil price rise. Although less obvious than the first, it is not too difficult to grasp either. The price of oil is quoted in American Dollars and given the USA’s massive trade deficit as well as its economy’s recent recessionary tendencies; the world price of dollars has been falling against several other currencies.

As the dollar turns softer, oil producing countries find it increasingly difficult to purchase necessities from the rest of the world to sustain their economies. The world depends on them for oil and they in turn depend on the rest of the world for almost all other commodities since apart from oil, nature in its fancy has endowed them with sand alone.

Speculation is the third and last factor that many analysts hold responsible for raising the price of the fuel. The arguments in this context center on forward and futures trading. Forward trading is a financial instrument used to hedge against anticipated inflation.

In the context of oil, it involves a contract between buyer and the seller for future transaction oil at a pre specified price. This means that forward trading rarely involves actual hoarding of oil by buyers with the intention of raising oil prices.

Oil price rise dissertation is as important issue which is linked with gas requirements to run a motor. The college dissertation takes a larger picture of the issue.