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Crude Oil Demand

In: Other Topics

Submitted By jnese88
Words 2698
Pages 11
PART I: CASE DESCRIPTION
1.1 INTRODUCTION
Crude oil is a mineral oil. It is a mixture of hydrocarbons of natural origin and associated impurities, such as Sulphur according to Energy International Agency. Further explained, under normal surface temperatures and pressure, crude oil is exists in the form of liquid. It has highly variable physical characteristics such as density. Saudi Arabia, Russia, United States, China, and Canada are the top five oil producer countries (2013). As the producer, the countries are daily extracting sum of crude oil barrels through the process of drilling from their reserves. The top five oil consumer countries are United States, China, Japan, India, and Russia (2013). The consumptions are due to the aggressive economy advancement and the fast-paced growth of related industries. It is estimated that due to the current rate of consumption, the worldwide reserves will become depleted by 2040. Forecasted by the International Energy Agency Oil Market Report, more than 93 million barrels of oil and liquid fuels are demanded daily worldwide. Annually, the production is being works out for more than 34 billion barrels. Demand for oil is consistently growing globally. Referring to the basic economics, total output of the crude oil reached its peak and the price of it will gradually rise with the demand. Depletion of oil will result in the falling rate of the production. The prices of oil will rise at a bigger scale. The exploration on the new reserves oil will become more vigorous.

1.2 OBJECTIVE OF THE STUDY
General objective
The main objective of this study is to cultivate the understanding on the demand for crude oils and identifying the factors that influence the demand for the commodity product.

Specific objective
The two targeted aspects: * To identify the effect of price towards the demand of the crude oil * To

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