Purpose of paper: to enhance understanding of how demand and supply influence the market equilibrium price in a particular market, and of market structures. The assignment is to write a paper describing the market for crude oil, the focus of which should be from the perspective of global market for crude oil. Sources can be: business-oriented newspapers, periodicals and journals. Can use (www.opec.org) and (www.eia.doe.gov) 8 pages double spaced.
1. In the global market for crude oil, what countries are the top three producers, exporters of crude oi? What country is the largest consumer?
2. What is OPEC? What countries belong to OPEC?
3. OPEC represents which market structure? What is OPEC an example of?
4. What is the primary objective of OPEC? Does OPEC influence demand or supply? How? Explain.
5. What is the current cash (spot) price of crude oil?
6. What has happened to the price of crude oil since mid 2008? Increase? Decrease?
7. Has there been a change in demand since mid 2008? Increase? Decrease?
8. Is the demand for crude oil elastic or inelastic? Explain
9. What was OPEC‘s production decision at the 151st OPEC Conference meeting held on 12/17/08, and at the 153rd OPEC Conference meeting held on 5/28/09