How the Global Demand for Oil is Impacting the World and Distribution of Wealth
This document is a summary for the research paper titled as above. The research aims to establish the current oil trade status, the reasons for the rise and fall of oil prices, and how these fluctuations affect the state of the world economy. The Organization of Petroleum Exporting Countries (OPEC) has forecasted a decrease in daily global oil demand to 89.57 million barrels from the earlier estimates of 89.6 million barrels per day. While OPEC countries expect slight decreases in volume produced per day, non OPEC oil producing countries maintain their daily capacity at 53.85 million barrels per day. Oil production decline for OPEC members, such as Nigeria, Iran, and Saudi Arabia was offset by increased production in Angola. OPEC’s control of the oil market will decline, as will do its reserves.
The global oil demand has continued to increase annually at an average 1 million barrels per year since 2010, while the supply is, at best, constant. This trend is leading to speculation, with 2012 the only year so far when there was a slight surplus production of 700,000 barrels per day average. The average prices per barrel for oil continue to fluctuate widely, between $25 a barrel in 2002 to $150 in 2008 and $125 in 2011, a situation that terribly affects the stability of the global economy.
It is expected that the price of oil will continue to rise, despite the increase in renewable energy production. The biggest beneficiary of oil trade in the next ten years is expected to be the U.S., while 90% of Middle East oil supply will go to the Asian markets.
In conclusion, it is expected that the wave nature of oil demand and supply, as well as fluctuation in prices, will continue for a long time. However, there will be no extended periods of low or high priced oil.