About Oil Prices

Jayeshvasava asked:


As a freely traded commodity, crude oil has seen vast shifts in the post-war era based upon speculation as well as the fundamentals of supply and demand. Oil was the basis for the emergence of the United States as a major industrial power in the modern era, powering the development of modern transportation and trade, as well as opening up the gates for expansion of international trade.  Oil prices play an important economic and political indicator for major developed nations.

Major geopolitical events ranging from the Suez Canal crisis to economic conflicts in the Middle East can be traced to shifts in the price of oil. Major energy producers such as Saudi Arabia and Russia have leveraged their energy supplies to ensure the world of a steady supply of freely traded Crude oil. The recent conflicts in the Middle East further highlight the impact of oil prices upon world politics. Oil prices, therefore, reflect perceptions on how freely traded the commodity will be in the near future, as well as estimates of anticipated future demand patterns for the commodity.  

At a core level, oil prices reflect the fundamental prediction of both supply and demand for crude petroleum. While the supply of world reserves continues to grow, many analysts expect that the freely available, traded level of crude will begin to fall relative to demand. Strategic sovereign oil firms have limited oil supply through cartels such as OPEC, which results in higher prices, as we saw prices nearing $80 per barrel in the early 1980s. The embargo on exports created conflict in the West, and further highlighted the political power of oil prices. Demand for oil hinges on the expansion of industrial power, and China has increased its domestic demand for petroleum twice over in the past decade.



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Barton Hernandez asked:


Jobs Offshore are among the most sought after in the oil and gas industry, and for good reason. It is exciting work, and an adventure. The pay is extreme (experienced offshore drilling jobs can pay upwards of 100k). Even entry level jobs offshore can pay over 60k. The friendship is like being in the military; your pal has your back, and you have his. When working jobs offshore, you can to work in new and exotic destinations.

Most, if not all, jobs offshore come with a good benefits package - health and life insurance, 401k, the works. The exceptions are well paid positions like underwater welder; you are paid a day rate or a per job rate (that can approach $900.00 a day in some locations ). With that kind of wage, one can buy his own benefits.

Jobs Offshore can be deadly - before you set foot on the rig, you’ll have to endure safety training and helicopter survival training. All nineteen employees survived. You will find the contest to get a high paying oil rig job is tough, especially for entry level positions, but if you know where to send your CV or Resume, and who to talk to, then it all becomes a lot easier.

The hardest thing about getting jobs offshore is landing the first hitch - it seems most companies need offshore experience more than even oil rig experience. Luckily, there are corporations that hire for entry level jobs offshore, such asroustabouts and roughnecks. In the US, this will be in Houston, Texas, and Lafourche, Louisiana.

Additionally, Transocean is now hiring as well. There are literally hundreds of offshore drilling contractors worldwide ; if you apply at each one of them, you are bound to get work, because in the end, it’s a numbers game - but endurance is necessary, particularly in this economy.

In the intermediate-long term, the requirement for jobs offshore is only going to go up. World energy demand will resume increasing as we emerge from this recession, and the wage rates for offshore workers will resume their upward spiral as well. It’s an amazing career, full of excitement and stories which will last a whole life.

Julian Gaston is a Freelance Writer, Chef, Webmaster, and Adventurer. For more information on the exciting world of jobs offshore, and how to break into the field, please visit us at Offshore Jobs Review, where you will find much helpful information on jobs offshore and how to get hired for one.



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Daniel Hirsch asked:


Oil is a very essential component in the industrial inventory of a country. It is the sole product which can ensure that the productivity of a country is not affected and that the industrial growth is not halted. Furthermore, it is very essential to make sure that the oil prices remain stable and there is no net upsurge in the oil prices on a global scale. This is very important as rise in oil prices means pumping in more money into the production process. This actually does not lead to any sort of increase in the productivity and industries have to suffer huge losses.

Heating oil, which is a major component for a number of industries, comes in the form f crude oil, diesel etc. Even though they are priced moderately, in the recent times, the re has been a considerable increase in their prices. Since such heating oil is also employed by homes to carry out specific operations, an upsurge in the price of the originally Cheap Domestic Heating Oil will lead to chaos in the financial structure.

Affordable Home Heating Oil prices fluctuate due to a number of factors. The change can be due to changes in the supply on account of depleting reserves, mechanical problem in the extraction and supply, high cost of transportation etc. Whatever be the reason, care has to be taken to ensure that such rising prices are contained.  Industry experts have even warned of a further steep rise in the price of home heating oil to the tune of 25% of the existing rates.

Discount Heating Oil Prices are also quoted by select companies. These companies deal with a number of suppliers who indulge in the wholesale supply of domestic heating oil and also engage in transactions with major industries. Normally, a subsidy s provided to the industry but the overall cost is borne jointly by the government and the industry.



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Imaginalis asked:


As the whole world knows; that the previous crude oil price hike is because of investors buying the commodity due to weakening US structure & Bush policies (invading Iraq & meddling with Iran). At one point, it rose to $145 per barrel. Now, the bubble bursts and the current price is below $55 per barrel. Will there be a second bubble in the near future?

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Spock (rhp) asked:


hypothesis — Congress caused the energy crisis [oil price crisis] by denying Americans the right to produce significant added volumes of energy here at home while encouraging the economy to continue growing and thus using ever more energy.

Since the reaction to this artificial crisis has been the recent $4 gasoline and then the government’s edict that all cars must raise their fuel economy by huge amounts in a few years, shouldn’t the government that caused all this be obligated to buy up and housing and business messes they caused in Cleveland and Detroit?

what are your thoughts?
your candidate just gave Ohio and Michigan to the opponents. You’ve been defeated in the elections — go home.

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sulekha47 asked:


I am not sure if i am right, but if i am wrong is the spill going to cost us more money for gas? and does anyone why the price is going up recently?
like why is the barrel price going up all of a sudden?

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kenneth h asked:


I am planning a travel Jan-feb, 2009. Should I buy tickets now or should I wait 1-2 weeks. Do you think that the fares would come down because of lower oil prices, early next year ?

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Jayeshvasava asked:


When oil prices rose to all time highs in 2008, a large variety of firms felt immediate pressure on their net profits as transportation costs rose. In an attempt to protect profit margins, many companies sought to pass on these expenses to consumers in terms of fuel surcharges, which further decreased consumer demand.

The rapid shifts in oil prices impacts both producers and consumers, resulting in uncertainty that can reduce overall economic activity. Investors often respond to this uncertainty by shifting their portfolios to companies that have developed alternatives to relying upon expensive transportation or that have effective hedge strategies against crude oil price shifts.

The overall financial markets suffer in the context of uncertain oil prices, as equity prices fall when investors seek to reduce risk to investing in more stable alternatives such as bond offerings and fixed-income securities to protect against the uncertainty related to oil price shifts.

One industry that is particularly affected is the stocks of airlines, which feel extreme pressure when oil prices rise. With thin margins based upon high operating costs, a sharp change in oil prices can impair the balance sheets of airlines, even when they have attempted to control for shifts by hedging oil prices into the future.

Many airlines have opted to pass on these surcharges to consumers in terms of additional fees, although increased competition has provided an opening to low overhead startups such as Frontier and Jet Blue Airlines. Overall, equities in transportation companies have fallen in the context of uncertain oil prices. Across nearly every industry, stock prices were negatively affected by rapid shifts in the price of oil. Since nearly every market sectors relies upon oil to pay for transportation costs, more stable oil prices allows for more stable profit expectations.



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Shoeless Joe asked:


I guess the Oil Companies will stick it to us as much as they can.

We really need to get off of our dependence on oil.

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Alice Chen asked:


www.shcri.com - On July 28th, 2008, China’s Development and Reform Commission issued a notice of lowering processed oil price — cut off 220 RMB/ ton (32.1 USD). The adjusted prices of gasoline and diesel were 6,510 RMB/ton (950.4 USD) and 5,770 RMB/ton (842.3 USD) respectively, equivalent to 0.16 RMB/L and 0.19 RMB/L from 0:00 on July 29th, 2009. This is the second price reduction of Chinese refined oil in 2009, and also the first reduction of refined oil price after the publication of the new price adjustment mechanism.

Market is the first to respond; in all parts of China, the wholesale price of refined oil has already dropped. Recently China’s wholesale price of refined oil dropped continuously; therefore the market profit space of wholesale markets has been greatly compressed. The wholesale prices of refined oil throughout China have been diving sharply; the average decline was between 500-600 RMB / tons.

Behind the cutting of prices is the weak demand. A few days ago, statistics of production and operation released by China’s largest processed oil seller — China Petroleum & Chemical Corporation shown that the whole sales volume for domestic oil products fell by more than 8% in the first half of 2009, with a decrease of almost 6 million tons; with the largest decline rate in retail sales volume of 12.77%.

According to “Oil Pricing Mechanism”, which published by Chinese government on May 8th, 2009, the adjustment of domestic oil products prices would be made when the average international market price of crude oil has been changing more than 4% for 22 days. On July 28th, the price in September crude oil futures contracts was about 67 USD/barrel on the international benchmark of oil prices in New York Exchange, and in the last domestic oil products price adjustment (on June 30th) the quote was about 70 USD / barrel, cut about 4%.

July 28th was just 22 working days from June 30th when China’s National Development and Reform Commission raised the price of refined oil. Monitoring data showed that as far as July 24th , in three regions such as Brent, Dubai, Cinta the change rate of average crude oil price have reached -5.41%, with a decrease rate of more than 5%.

China Development and Reform Commission announced that after this price cut, the Chinese domestic refined oil prices remained more than 7 USD higher than international oil prices, and much lower than the three types of reference prices. However, many people questioned that on June 1st and June 29th, China National Development and Reform Commission twice raised the price of refined oil prices by about 6% and 9% respectively, while at this time the price-cut range is only 4%, which means that the decline rate of domestic refined oil prices cannot keep up with that of international oil prices. Therefore it cannot change people’s questioning for “fast increase and slow decrease”.

The Change Events of China’s Refined Oil Price Since 2009:

? on Jan 14th, gasoline and diesel prices decreased by 140 RMB/ton and 160 RMB /ton respectively 

? on March 25th , gasoline and diesel prices increased by 290RMB /ton and 180 RMB /ton respectively

? on June 1st , the price of petrol and diesel were increased by 400 RMB /ton respectively

?on June 30th , products such as gasoline and diesel oil prices both increased 600 RMB /ton

?on July 28th , gasoline and diesel prices reduced 220 RMB/ton respectively

 

Since China officially launched the fuel tax reform this year, oil prices have been adjusted for 5 times, the increase rate far exceeded the decline rate.

Take the ex-factory price of gasoline as an example, on January 14th and July 28th the price went down by 140 RMB/ton and 220 RMB/ton respectively, but on March 25th, June 1st and June 30th it was raised by 290 RMB/ton, 400 RMB/ton and 600 RMB/ton respectively. By integration calculation, gasoline prices in China have raised 930 RMB/ton this year (135.8 USD/ ton.)

 

Source: China Research and Intelligence

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