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Daily changes in price of crude oil, natural gas, and gasoline


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Daily changes in price of crude oil, natural gas, and gasoline
Energy, which comprises of crude oil, natural gas, coal, and gasoline is one among the
most important and demanded for commodity throughout the world. It is a given that energy,
especially in the developed and developing countries, forms one among the major pillars for
economic sustainability. Many of the economic activities in all fields of production including
industrialization, factory operations, medical and educational operations, and even domestic
activities are hugely reliant on energy. Moreover, the entire transport system throughout the
world is very dependent on energy. Most of the locomotives including vehicles and airplanes use
one type or another of energy to run their engines. Thus, it is indisputable that energy is
paramount in the entire global society, and consistency in its production as well as stability in its
prices would play a massive role in ensuring global economic growth.
Although energy, more so, crude oil, gasoline, and natural gas is vital for economic
development of many nations throughout the world, it is inevitable that its prices are on constant
variation. The prices of petroleum products are on constant changes, and are dependent on such
factors as the political stability of the leading oil-producing states in the world, the factors that
affect the process of refining petroleum products, the economic situation of the energy-producing
states and that of states confirmed to have oil deposits, and weather problems among others.
Thus, it is clear that no one state in the world has full control on the prices of petroleum products
across the world. All countries throughout the globe, including the leading economies such as the
United States of America and China, require sufficient supply of energy for the good of its
economy and that of its citizens. With that, they have to collaborate with other important states

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that have some influence in the global energy production to come up with multinational policies
with which to regulate the prices of energy in the global markets.
On the verge to regulate energy prices regionally and eventually globally, the society has
established a number of national and international authorities that work to liberalize the energy
markets. Primarily, these authorities aim at protecting the rights of consumers of petroleum
products from overexploitation by the leading producers of the commodities as well as curbing
the terrible ordeal of oligopoly. Some of the major regulatory authorities in the field of energy
production include the Australian Energy Market Commission; the Energy Market Authority in
Singapore; the Energy Community in Europe; the Nordic Energy Market; and the European
Union. The energy regulatory authorities seek to discourage volatility of prices, facilitate the
needed reforms in the energy sector, and search for evidence of anti-competitive practices in the
energy markets such as the presence of monopoly among others. All these activities aim at a
common goal, which is to try to control the daily changes in prices of crude oil, gasoline, and
natural gases.
Apparently, the variations in the prices of petroleum products are driven by the global
changes in their supply and demand together with several other geopolitical factors. The
Organization of the Petroleum Exporting Countries (OPEC) is the unison body that controls
worldwide oil production. OPEC targets to keep a stable price per barrel for crude oil.
Political stability is paramount for the growth of any economy, as it contributes majorly
in the creation of an appropriate business or rather operational environment in different fields of
production. Like any other sector of operation, the sector of oil production, which involves a
series of operations such as mining of the crude oil, transporting it to the refineries plants for
processing, setting the national and international prices for the petroleum products, and
eventually distributing them to the areas of demand; require high levels of political stability. A

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peaceful state will definitely be able to run all these operations without much strains and
restriction, and vice versa.
A nation that is stable politically will undoubtedly be able to support the programs of oil
production. It will develop good production policies such as the preservation of oil barrels from
destruction, offer better yet appropriate remuneration packages for the employees working in the
petroleum production industry, nurture as many competent professionals in this field as possible,
and protect the interests of its economic development as well as that of its citizens.
For instance, the Middle East, which includes such states as Iraqi, Ukraine, Afghanistan,
Iran, and many more, has been the leading producer of petroleum products throughout the world
for several decades. Given that this region accounts for a significant amount of oil production in
the global market, the issues of political instability (in the Middle East) has been of enormous
concern to all states in the entire world. Civil and international warfare among these countries are
bound to create political instability, which consequently translates to massive imbalance or
variation in the prices of petroleum products. For instance, in 2008 when, both Iraqi and
Afghanistan were at war, it was evident that the prices of oil barrels, which are processed to
produce finished petroleum products such as engine fuel, gasoline and natural gas, increased
from 70 U.S dollars to over 136 U.S dollars. (Bleckley 105) However, these states have enjoyed
high levels of political stability in the recent past, including the whole of the years 2013 and
early 2014. (from January 2014 to current time, April 2014). This has led to a stable supply of
petroleum products in the global market, and consequently stability in the prices of the products.
Because of political instability, suppliers are often unable to convince buyers that they
would be able to properly, and timely deliver oil products to them every moment they demand.
Wars also affect the oil production environment, as the operations of many plants that mine
petroleum products, the oil-processing factories, and transportation systems are likely to be
affected. In addition, the majority of workers in the various fields of oil production such as

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Awesome! Perfect study aid.