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The World Oil Market in 2008
For more resources on the economics of Oil & Gas, visit our dedicated Economics Blog Channel
Market volatility <ul><li>Crude prices reached a record high in July of $147 a barrel </li></ul><ul><li>By the end of the ...
A super-spike in prices
Where next?
Oil – a case study in price volatility
Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1
Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1 D2
Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1 D2 P2
Speculation can cause price spikes Short run supply Demand P1 Q1 D2 P2 P3 Quantity of Oil Price per barrel D2 + speculation
Supply more responsive over time…… Short run supply Demand P1 Q1 D2 D2 + speculation P2 P3 Medium term supply P4 Quantity ...
Falling demand as recession bites Short run supply D4 P1 Q1 D2 + speculation P2 P3 Medium term supply P4 Quantity of Oil P...
Falling demand as recession bites Short run supply D4 P1 Q1 D2 + speculation P2 P3 Medium term supply P4 P4 Quantity of Oi...
Oil prices and the number of rigs
Will OPEC succeed in cutting output and stabilising prices?
OPEC’s share of world supply
UK oil consumption now at a twenty year low
Oil producers – selected countries
How much will world demand fall in 2009?
Oil provides a bonanza for some
The UK is now a net oil importer
UK quarterly balance of trade in oil
And North Sea oil output is well beyond the peak
Crude prices and prices at the pumps
Marginal and average cost <ul><li>It has been estimated that the average cost of oil per barrel is around $50  </li></ul><...
Oil Market Videos <ul><li>OPEC agrees record oil output cut </li></ul><ul><li>Russia rues oil price fall </li></ul><ul><li...
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  1. 1. The World Oil Market in 2008
  2. 2. For more resources on the economics of Oil & Gas, visit our dedicated Economics Blog Channel
  3. 3. Market volatility <ul><li>Crude prices reached a record high in July of $147 a barrel </li></ul><ul><li>By the end of the year prices had collapsed – on one measure light sweet crude oil fell below $40 a barrel </li></ul><ul><li>OPEC is desperately trying to stabilise prices through a series of production cuts </li></ul><ul><li>The main cause of the collapse in prices is a sharp fall in global demand for oil </li></ul>
  4. 4. A super-spike in prices
  5. 5. Where next?
  6. 6. Oil – a case study in price volatility
  7. 7. Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1
  8. 8. Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1 D2
  9. 9. Explaining high and low oil prices Quantity of Oil Price per barrel Short run supply Demand P1 Q1 D2 P2
  10. 10. Speculation can cause price spikes Short run supply Demand P1 Q1 D2 P2 P3 Quantity of Oil Price per barrel D2 + speculation
  11. 11. Supply more responsive over time…… Short run supply Demand P1 Q1 D2 D2 + speculation P2 P3 Medium term supply P4 Quantity of Oil Price per barrel
  12. 12. Falling demand as recession bites Short run supply D4 P1 Q1 D2 + speculation P2 P3 Medium term supply P4 Quantity of Oil Price per barrel
  13. 13. Falling demand as recession bites Short run supply D4 P1 Q1 D2 + speculation P2 P3 Medium term supply P4 P4 Quantity of Oil Price per barrel
  14. 14. Oil prices and the number of rigs
  15. 15. Will OPEC succeed in cutting output and stabilising prices?
  16. 16. OPEC’s share of world supply
  17. 17. UK oil consumption now at a twenty year low
  18. 18. Oil producers – selected countries
  19. 19. How much will world demand fall in 2009?
  20. 20. Oil provides a bonanza for some
  21. 21. The UK is now a net oil importer
  22. 22. UK quarterly balance of trade in oil
  23. 23. And North Sea oil output is well beyond the peak
  24. 24. Crude prices and prices at the pumps
  25. 25. Marginal and average cost <ul><li>It has been estimated that the average cost of oil per barrel is around $50 </li></ul><ul><li>And that the marginal cost of bringing on additional output is between $75-$80 per barrel </li></ul><ul><li>Explain some of the reasons why there is a difference between the marginal and average cost of production. </li></ul>
  26. 26. Oil Market Videos <ul><li>OPEC agrees record oil output cut </li></ul><ul><li>Russia rues oil price fall </li></ul><ul><li>Oil prices fall below $50 per barrel </li></ul><ul><li>Oil price affects crayon firm </li></ul><ul><li>High oil prices lifts BP profits </li></ul><ul><li>New battle over Arctic oil </li></ul><ul><li>Why High Oil Prices Hits Us All </li></ul>

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