The reduction in the disposable incomes for most households across the globe due to rising prices of consumables at the backdrop of declining credit availability was directly attributable to the decline in the demand for demand for oil and other oil related products in theUSas displayed by appendix 7.
Reduction in demand for oil reached an estimated 1.5 million barrels per day, representing 1.6% of the global demand in 2009. As indicated by the International Energy Agency, the demand fell to 84.9mn barrels per day, and most of this is directly attributable to the recession and destruction originating from the surge in prices in 2008. In theUSalone, the demand fell by close to 1mn barrels per day.
TheMiddle Eastregion is expected to be last bastion in the recession owing to the inelasticity of demand for oil in spite of the dropping fuel prices as a result of a slump in supply and demand. According to the World Bank Publications (2009: 37) the demand for oil is projected to remain low with prices expected to stagnate.
The most reliable measure of long-term reliability of oil supply from a region is the sufficiency of proved reserves. Proofing of reserves is done through geological and engineering analysis of the oil fields, with the overriding possibility of increase in the amount of reserves through new discoveries and technological improvement in the oil exploration and extraction methods. The global reserves are as indicated in appendix 3, with theMiddle Eastpossessing the largest volume of rewards across the period under analysis.
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