The factors affecting global oil prices, and what can happen if prices shift dramatically.
- Oil price is determined by the current supply to world markets, the amount in reserves, and how much it's in demand.
- An oil shock occurs if the price is increased dramatically in a short time period.
- Oil shocks occur when quantity is low, oil reserves decline and demand rapidly increases.
- It is expected that oil shocks will become more severe and frequent as supplies run out.
For over a hundred years, global oil prices were stable.
But today, they can fluctuate widely with far-reaching impacts for everyday life.
Prof Andrew Oswald, University of Warwick, UK - "When the price of oil shoots up and interferes with the extent of trade, it slows down and makes more expensive ...
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