Crude Oil Final

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CRUDE OILCRUDE OIL:: FACTORSFACTORS

AFFECTING CRUDE OILAFFECTING CRUDE OILPRICESPRICES

Presented by:Presented by:

Shweta GargShweta Garg

Sanchit RohatgiSanchit Rohatgi

Farida OsmanFarida Osman

Zeeshan AliZeeshan Ali

Vinay AgarwalVinay Agarwal

Sagun BajajSagun Bajaj


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IntroductionIntroduction

One of the most basic global commoditiesOne of the most basic global commodities

Price fluctuation impacts businesses &Price fluctuation impacts businesses &

IndustriesIndustriesCrude oil prices rose to record147$/BarrelCrude oil prices rose to record147$/Barrellevellevel

Volatility in Stock Markets across theVolatility in Stock Markets across theworldworld

Led to the rise in inflation level globallyLed to the rise in inflation level globally


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Factors affecting Crude PricesFactors affecting Crude Prices

Demand

Iraq post-warinsurgency

OPECdecisions

Venezuela Natural Causes

Weather

Crude Oil


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0

10

20

30

40

50

60

70

80

90100

110

120

130

140

150

Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

(Dollarsper

Barrel)

Forecast

Crude prices often decline justpriorto winter

But did not this

winter

Crude oil prices, having recently exceeded $140 perCrude oil prices, having recently exceeded $140 per

barrel, are projected to decline slowly over thebarrel, are projected to decline slowly over the

forecast.forecast.

Lon -Term Ener Outlook


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Multiple and hard-to-predict factors drive oil pricesMultiple and hard-to-predict factors drive oil prices

Non-OPECSupply Growth

Iran

EconomicGrowth

Inventory

Value ofU.S. Dollar

Chinas Oil Demand


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Dollar-based economies have experienced higher oilDollar-based economies have experienced higher oil

prices than those with other currencies.prices than those with other currencies.

0

20

40

60

80

100

120

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08

(Dollars/Euros

per Barrel)

$ per barrel

per barrel

$95.39

64.68

ort-Term Energy Outlook
http://en.wikipedia.org/wiki/Image:Flag_of_Libya.svg


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EstablishmentEstablishment --10 Sep,1960 in Baghdad10 Sep,1960 in Baghdad

HeadquartersHeadquarters

ViennaVienna

,,

AustriaAustria

Official language-Official language- EnglishEnglish

Secretary GeneralSecretary General --Abdallah Salem el-BadriAbdallah Salem el-Badri,,LibyaLibya sincesince

January 1January 1,, 20072007))

Total areaTotal area--13,753,061 km13,753,061 km

Expected populationExpected population -619157014-619157014

Organization Of The Petroleum ExportingOrganization Of The Petroleum Exporting

CountriesCountries
http://en.wikipedia.org/wiki/Viennahttp://en.wikipedia.org/wiki/Viennahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/w/index.php?title=Abdallah_Salem_el-Badri&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Abdallah_Salem_el-Badri&action=edit&redlink=1http://en.wikipedia.org/wiki/Libyahttp://en.wikipedia.org/wiki/Libyahttp://en.wikipedia.org/wiki/January_1http://en.wikipedia.org/wiki/January_1http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/1_E12_m%C2%B2http://en.wikipedia.org/wiki/1_E12_m%C2%B2http://en.wikipedia.org/wiki/Image:Flag_of_Libya.svghttp://en.wikipedia.org/wiki/Price_of_petroleumhttp://en.wikipedia.org/wiki/1_E12_m%C2%B2http://en.wikipedia.org/wiki/2007http://en.wikipedia.org/wiki/January_1http://en.wikipedia.org/wiki/Libyahttp://en.wikipedia.org/w/index.php?title=Abdallah_Salem_el-Badri&action=edit&redlink=1http://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Vienna


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Algeria, Angola, Ecuador, Iran, Iraq, Indonesia,Algeria, Angola, Ecuador, Iran, Iraq, Indonesia,

Kuwait, Nigeria, Libya, Qatar, Saudi Arabia,Kuwait, Nigeria, Libya, Qatar, Saudi Arabia,

United Arab Emirates, Venezuela.United Arab Emirates, Venezuela.

MEMBERS OF OPECMEMBERS OF OPEC


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FUNCTIONSFUNCTIONS

It Coordinates the oilIt Coordinates the oil

production policiesproduction policies

Helps oil producersHelps oil producersto achieve ato achieve a

reasonable ratereasonable rateTry to stabilize theTry to stabilize the

marketmarket Maintaining stabilityMaintaining stability

in oil productionin oil productionApart from this, the member countries alsoApart from this, the member countries alsomeet from time to time to discuss uponmeet from time to time to discuss upon

expected demand for petroleum in countriesexpected demand for petroleum in countries


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Crude Oil: Impact on Indian EconomyCrude Oil: Impact on Indian Economy

Crude & byproducts contributes 14.2% of WPI ofCrude & byproducts contributes 14.2% of WPI of

IndiaIndia

Trading of crude oil is based on SingaporeTrading of crude oil is based on Singapore

mercantile exchangemercantile exchangeMassive losses incurred by Oil companiesMassive losses incurred by Oil companies

because of Government subsidies.because of Government subsidies.

Rise in ATF, led to the booming aviation industryRise in ATF, led to the booming aviation industryplunge southwardsplunge southwards

Huge decline in sales of automobile industryHuge decline in sales of automobile industry


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Crude Oil: Skyrocketing InflationaryCrude Oil: Skyrocketing Inflationary

IndexIndex

Led to soaring WPI commodity prices drivingLed to soaring WPI commodity prices driving

inflation alarmingly.inflation alarmingly.

Inflation rose to above 13% from a level ofInflation rose to above 13% from a level of4.23% in February 20084.23% in February 2008

High input cost for manufacturing industry : theHigh input cost for manufacturing industry : thelargest GDP contributorlargest GDP contributor


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Market balance should loosen as demand growthMarket balance should loosen as demand growth

slows and non-OPEC supply growth increases.slows and non-OPEC supply growth increases.

0.8

1.5 1.6

1.4 1.41.5

0.0

1.4

1.6 1.61.4

1.21.11.2

0.9

1.4

1.1

0.30.2

0.1

3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 2008-

Q4

2009-

Q1

2009-

Q2

2009-

Q3

2009-

Q4

MillionBarrels

per Day

World Oil Consumption Growth Non-OPEC Production Growth

Long-Term Energy Outlook


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THANK YOUTHANK YOU

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Crude Oil Final