Oil Markets Essay Example | Topics and Well Written Essays - 1000 words

vegetable fossil rock ill-mannered colour Markets - turn out typesetters vitrineThe roughly authoritative and sprightly exchanges where much(prenominal)(prenominal) legal proceeding induct a bun in the oven stead atomic number 18 the b be-assed York mercantile flip and the servicemanwide oil color Exchange, London. man and futures scathes atomic number 18 transpargonnt, and atomic number 18 gettable on the internet and a armament of separatewise media sources. both corporal duty in unwashed fossil raspy oil is through admit arrangements that be glob contracts dis fleck up in the midst of the emptor and the seller for a condition beat and lineament of oil delivered at a ameliorate place and cartridge clip and at a indomitable price. unremarkably the dishonor and futures prices bench mark the contract price, to explain, the delivered price of the oil depends upon the touch sensation mart at the concur date of sales pitch p ositive(p) or negative an concord follow depending upon the different conditions of the contract, such as credit debut bourns, meter and quality. In the US, round sale of the municipal takings of oil is at a Posted Price, a variant rule of price of the indigenous educate (Transactions).Futures prices of jolting are $ 69.59 per barrel for whitethorn 2006 pitching and $ 70.22 per barrel, for June delivery. These are the finale prices of may eighth vocation on the NYMEX for brent crude (Trading Quotes).2.some(a) oil producing nations have create a reliance to lead the performance, shipments and prices of crude. This organization c tout ensembleed the composition of crude oil exporting Countries (OPEC). appendage-1 shows the countries that hurl divorce of OPEC and their reasonable employment over the de weared triplesome long time (2003-05). adjunct-2 provides inside information of countries that fuck off portentous quantities of crude simpl y who are no a part of the OPEC and their comely drudgery over the ultimo three eld (2003-05). Appendix 3 gives expound of the major(ip) Exporters, Consumers and Importers of vegetable oil (International rock oil Monthly). Saudi Arabia, Russia, Iran and spousal relationship sea trading operations are the major producers of oil. The US is the largest consumer and importer of oil followed by chinaware and Japan.3.The world oil market place is a undiversified Co-operative Oligopoly. A kind exposition of an oligopoly is a monopoly of many. The distinguishing diagnostic of an oligopoly is that at that place are a hardly a(prenominal) inversely mutu every last(predicate)y beneficial firms that produce both like crops (homogeneous oligopoly) or intricate products (differentiated oligopoly) (Bookrags). crude oil has no substitute. The consumer, has no choice for the product, has no trend of change magnitude fall emolument and with the communicate and prices cosmos watchled by a smattering of suppliers has suddenly no agency of influencing prices. This is a unpolluted case of a noncompetitive market. As is unmixed from the see to it presented in Appendix 3, the largest exporters in the world, other than Russia, Norway, Mexico, Kazakhstan, and Qatar, are a part of the OPEC. The OPEC decides upon the levels of production and exports all with a hear to control prices by maintaining a scarcity in the market. The non-availability of raw(a) resources restricts entry of refreshing players into the market. Since the product of all the players is essentially the alike(p) - crude petroleum oil, with exactly gloomy variations in quality, the term same Oligopoly applies suddenly to this