Prior to the economic crisis, the demand for oil prices was on a gradual increase across the globe. Economic growth across the globe contributed greatly to the growth in demand for oil and oil products owing to the increase in demand by individual and industrial consumers, who experienced an increase in demand for goods and services.
The fact that most economies were experiencing a boom implied that the high levels of employed indicated an increase in the number of individuals commuting to work on a daily basis and the number of machine hours on a daily basis.
Since most of the oil consumer by individuals goes to the transport sectors of the specific economies, an increase in the number of individuals commuting is bound to increase the consumption of oil. Increased income levels among consumers culminate in the amount of disposable income among households as well the government spending. Consequently, increased consumption of services including holidays, expenditure on additional automobiles as well as migration to larger homesteads which consume more energy, will amplify the demand for oil on a national scale. This increase in demand for oil motivates the oil exporters to increase their daily output in order to meet the demand. Incase the demand is not sufficient, prices are bound to increase.
Over the years, the increase in demand for oil has meant an increase in the revenue levels of the oil exporters in theMiddle East. When the supply is sufficient and prices are low, the region will benefit from production of high quantities of oil. Incase the quantity is low; the increase in prices per unit will translate to an increase in the oil revenues.
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