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In long run, Speculation is what determines oil prices and not supply and demand forces, anyone who has a method for forecasting oil prices better than the futures markets can get rich very quickly, Samuelson (2010)

1. Executive summary World economic condition (GDP) and population growths are the main drivers of the crude oil market. This is practical demonstrated in developing countries with strong emerging economies whereby middle class citizens tend to use more fuel for transportation than before because they now afford to own vehicles. In addition, Oil market is depending on tanker market which plays a great role in transporting oil across the world through sea. Crude oil market as any other commodity is influenced by relative forces of supply and demand of the products; however the crude oil market is rarely doing so, its prices are more influenced by speculation rather than market forces. Supply and demand of Oil market have many drivers that are used to trigger its production and consumption worldwide. Economic growth (GDP), availability of refinery factories and market speculation are most important demand stimulus of crude oil market. While on supply side among other its depending on production capacity, oil reserve, tanker markets and etc. At the end of 2011 more specifically last two quotas; world crude oil demand will increase by almost 2% mainly in developing countries like china which expected to continue in consuming massive tonnage of oil to cover its emerging economy. Following Japan Tsunami and Arabs nations upraising and persistence increase in demand to cover Japanese gap of nuclear power failure, definitely prices of crude oil in world market will go up a bit higher in the third and fourth quota of 2011. However, oil suppliers are expected to have extra production of oil to cover the gap but demand is expected to outweigh the supply. From this end between July and December 2011, author of this essay is estimating harsh and unpleasant market situation to both suppliers and buyers of the

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commodity, buyers have to pay higher prices while suppliers must stretched themselves toward maximum production capacity. 2. Background Crude oil is natural liquid existing in the rocks might be at sea or land; its mostly contain complex hydrocarbons with some additional organic material Hamilton, (2008). Crude oil is a historical business well back from 1784 when Peter Kalm of Sweden published map showing oil springs of oil Creek, Merriam (1992). Oil normally comes up with gas and is the major fuel used on the planet. Oil has to be transported to refinery factories by pipe line or specialised ships known as tankers. Depending on the quality and expertise of refinery process, crude oil will produce 50%-Gasoline, 40%-Diesel fuel, heating oil, jet fuel and kerosene and 10% will be residual fuel oil. (Andrews, et al., 2010. See figure; 1) Crude oil is predominantly

produced by OPEC countries, notable Saud Arabia is leading in production and it has relatively high volume of crude oil reserves which expected to last for the next 75 years to come (See table: 1). However, some other

countries like USA and Russia are among world giant oil producers. It is of no doubt that the entire world is desperately in need of crude oil and its products. As noted earlier, oil is transported by two major forms ships and pipelines, but ships are major transporting mode in existence which can ferry mass volume of production across the world at one time up to 200,000+ dwt (very large crude oil carriers). As a general perception, oil producers sell its oil where it can fetch more money; hence crude oil is sold to the most nearest market possible so as to get more profit by saving on transportation costs (tonne miles), it is however agreed Hamad B. Hamad MBA in Maritime Management (000455020) Page 2 Figure: 1. Source: Andrews, et al., 2010.

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that producer and seller friendship and long-term commitment are also play part in determining where oil is going to be sold.

Table; 1:

Summary of Reserve Data as of 2010 Reserve life *

Reserves 109 Country Venezuela Saudi Arabia Canada Iraq Iran Kuwait UAE Russia Kazakhstan Libya Nigeria United States China Qatar Algeria Brazil Mexico T/of 17 reserves bbl 2,980 2,670 1,790 1,430 1,380 1,040 980 600 470 410 360 210 16 15 12 12 12 1,243 109 m3 474 424 285 227 219 165 156 95 75 65 57 33 3 2 2 2 2 198

Production 106 bbl/d 3 10 2 4 4 3 3 10 1 2 2 8 4 1 2 2 4 64 103 m3/d 430 1,540 330 560 640 410 460 1,570 220 270 380 1,190 620 140 350 370 560 10,100

201 75 188 112 95 110 93 17 93 66 41 8 11 46 15 14 9 54

Sources; OPEC,2011
*

Reserve to Production ratio (in years), calculated as reserves / annual production. (From above)

From economic point of views while holding other factors constant, final crude oil price is determined by forces of demand and supply of the product. As a general rule, the higher the demand the higher the price and the opposite is also true, the lower the demand the lower the price, Mobert, ( 2007). According to the oil economist, crude oil prices have never been determined by the market forces derived by demand and supply only, but speculators and hedgers are what influencing prices of this product in the market, more specifically the futures market, Silvapulle & Moosa (1999). Hence as commodity, crude oil is traded

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imperfectly in competitive world market whereby there are many customers but very few supplers, Rifflart & Chevillon (2008). Current crude oil price on the world market is $113.85 per barrel as at 12th may 2011, thisismoney (2011).

Figure; 2

World Oil Reserves and Trade Routes

Sources: Singh, 2011

3. Supply and demand of crude oil 3.1 Demand and supply theory; In a perfect market economy, the prices of goods and services are influenced by the interaction of the market forces of supply and demand. If there are only a limited stock of some product available, competition between potential buyers tends to see prices rise, a consumers bid up prices. Similarly, competition between sellers of the product tends to see prices fall, as they try to attract buyers. Markets generally reach an equilibrium price and quantity, where suppliers and consumers reach a compromise. Setting prices too high can lead to low sales, and the potential for making a loss, Blanchard & Quah (1990. p. 661). From this perspective, equilibrium price is what all suppliers and customers agreed on in a perfect competitive market situation. Competitive perfect market on other hand is market Hamad B. Hamad MBA in Maritime Management (000455020) Page 4

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situation whereby there are large number of buyers and sellers in the market to the extent that no single buyer or seller can influence the market price of commodity, Smith (1962). Is the crude oil market perfect? Surely not as number of buyers are always outweighed the suppliers, holding other things constant suppliers above all are in the upper hands position in this market, Rifflart & Chevillon (2008). Interestingly, crude oil suppliers have some form of curtail association like Organisation of the Petroleum Exporting Countries (OPEC) which specifically designed to control the interest of the members states (crude oil suppliers) more specifically on production controls mechanism which automatically will trigger the world crude oil prices and demand, some time know OPEC basket prices policy, OPEC (1960). According to IEA (2011. p.3) 40% of world crude oil production is controlled by OPEC and 38% of world crude oil goes to Organisation for Economic Co-operation and Development countries (OECD). 3.2 Crude oils demand determinates As noted in paragraph one above, crude oil demand is function of the demand of its associated products like petroleum, diesel, jet fuel, kerosene and others. From this end, crude oil can be described as high volatile commodity despite of having relatively inelastic demand curve; i.e a change in crude oil price has little impact to the demand of the product as it is almost a necessity product for day-to-days world economic activities. Oil is volatile as its very quickly responds to world macroeconomic factors and news, Tsunami in Japan and Arabs uprising are good examples to explain how volatile oil and its products are. Common factors that influence demand for crude oil are: cyclical demand, prices of substitutes, market speculation and changes in climate, Riley (2006). 3.2.1 Cyclical demand; Demand for oil has strong link to the world economic growth, the higher the economic growth rate the higher the demand for oil, Singh (2011). Oil become important source of energy to most of the industries and it is almost there is no its close substitute. A good example which shows that there is link between oil and economic growth is China strong emerging economy, surely its trigger more oil production to close the demand gap. Other

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emerging economies like India and Brazil have the same impact to the world oil demand. Other factors that have impact to the oil consumption are change in interest rates, currency exchange rate, population and change in per capital income, Dargay (2007). Figure: 3.
450000 100mln 400000 350000 300000 250000 8 200000 150000 100000 50000 0 2000 GDP growth% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 99215 109655 120333 135823 159878 183868 210871 257306 300670 340903 397983 8.4 8.3 9.1 10.0 10.1 11.3 12.7 14.2 9.6 9.2 10.3 6 4 2 0

China GDP and Growth in 2000-2010

% 16 14 12 10

Sources; Wenzhang, W. 2011. Figure; 4. Chinese oil consumption (1980-2010 and estimation to 2010)

Source; Stuart, 2011

The same case applies to the general world economy when economy expands there is a tendency of increasing of oil consumption and the opposite is also true. (Figure: 5) Hamad B. Hamad MBA in Maritime Management (000455020) Page 6

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Figure; 5. World GDP growth and oil import

12 10 8 6 (%) 4 2 0 -2 -4 -6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 oil import (%) GDP growth (%)

Source: IMF, 2011

3.2.2 Price of substitutes: Like other commodities, demand for crude oil is influenced by the prices of its substitutes, For example, price of natural gas will have high impact to crude oil as it is an energy substitute to oil, EIA (2010). For many decade scholars believed that, crude oil and nature gas has same demand properties and will always goes in the same direction, but this has just been proved wrong when world realised massive uses of natural gases include in green cars and as an electric substitutes, moreover factors that trigger uses of crude oil are now different from those of natural gas hence they are responding differently in the world market, Hyes (2005). Also introduction of biofuel has impact to consumption of crude oil however, it is very slightly, 2007 data show that the introduction of biofuel reduces international fuel prices by between 1.07 and 1.10%, as well as reduces the quantity of fossil fuel (i.e., gasoline and diesel) consumed by oil-importing countries by between 0.3% and 0.7%. The global amount of fuel consumed (gasoline, diesel, and biofuels), however, increases by 1.5-1.6%. Finally, Hamad B. Hamad MBA in Maritime Management (000455020) Page 7

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the introduction of biofuels causes welfare in oil-exporting countries to decline by 1.051.76%, but it causes welfare in oil-importing countries to increase by 2.92-4.10%, Hochman, G, et al (2010. p. 113). Uses of nuclear power has also significant impact to the uses of crude oil although they are indirectly competing, nuclear has many thing to be considered before put into use including economic, productivity, convenience, regulation, availability, product quality and social preferences, still production of oil would be extensive without uses of nuclear reactors to produce power mostly in the form of electricity, Toth, & Rogner (2004) 3.2.3 Market speculation; Crude oil is traded in the market the same as other commodity, its market is divided into two, spot and future markets. Mostly spot market is influenced by the supply and demand forces of the market and priced at equilibrium while future markets has nothing do to with supply and demand theories, simple based on future speculations that market will be good and worth to sell and buy at a given price at a given time for specific tonnage of oil, Moosa & Al-Loughani (2002). Spot market involves physical sell of barrel of oil while future is financial instrument designed to spread market risk to seller and buyer equally. It is believed that, 60% of the today world crude oil price is function of speculation driven by larger trader bank and hedging firms. Companies that dealing with futures are Nymex of New York and ICE in London, mostly they provide bench marking of what is likely to be future prices for one barrel of crude oil at a given future time. The third company is Dubai Mercantile Exchange-DME in Dubai doing the same job. Figure; 6. Snap shot of crude oil futures prices (March 2010- March 2011)

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Source; ICE, NYMEX as cited by IEA, (2011)

3.2.4 Changes in climate; Weather condition has impact to the final crude oil price, harsh cold condition will necessitate to more heating fuel and this will automatically trigger more demand of the crude oil and the opposite is also true less fuel during the summer. 3.3 supply determinates of Crude oil Unlike demand of the crude oil; supply of the crude oil is seen into short run and long run form in international markets. The ability to produce more oil is depending on what so called aggregate supply. Aggregate supply predicts the volume of crude oil produced within the market at a given price level. In simple terms, aggregate supply represents the ability of an oil industry to produce crude oil either in the short-term or in the long-term. It tells us the quantity of real GDP that will be supplied at various price levels. The nature of this relationship will differ between the long run and the short run, Ball & Mankiw (1995. p. 162). In short run, oil can be produced at a desired level to the market with variability in production given state of production technology and fixed uses of capital inputs i.e the oil industry is producing from feasible level of oil reserves and a given stock of capital machinery use to extract that oil. From this end production of oil in short run mode become elastic when production capacity get close to its limit. In short run the supply curve of crude oil is affected by: profit motive, spare capacity, stocks and external shocks, Riley (2006)

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The long run aggregate supply try to predict the total crude oil production when there is changes in oil reserves and fixed capital items used in production of crude oil including technology that will make more efficiency on production process. At this level price is not influencing production as compared to the short run mode, Riley (2006). The long run aggregate supply curve will always be in vertical form. (See figure. 7 & 8 pg. 10) In the long run supply of crude oil is affected by: Oil reserves, Exploration, technology and shipping freight markets.

Figure: 7

Figure: 8

Source; Gisser & Goodwin, 1986.

3.3.1 Profit motive; Perhaps the major goal of any oil company or nation is maximise its profit as much as possible. Oil suppliers can do anything in their hands to put their product at the highiest possible price so as to improve their bottom line, this may include anything from choosing the nearest market to save freight charges (the longer the distance oil is transported the higher the freight charges and hence the higher the cost of the oil). Some other techniques are like OPEC production quotas, as discussed above, OPEC control significant amount of world crude oil supply IEA (2011), hence OPEC are in position to set specific production level to control the market price and hence maximise their profit per barrel sold. Doing so, they Hamad B. Hamad MBA in Maritime Management (000455020) Page 10

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are carefully keep close eye from the customers reactions as rising oil prices have great impact to microeconomics of the oil market and their macroeconomic consequences. If the price went up for long time, customers may think of having an alternative as a source of energy. So what they are doing is to adjust market according to the existing circumstances. Figure; 2. World demand and supply of crude oil, million barrel per day
World demand (a) OPEC supply (b) Other world oil suppliers Difference (b-a) 2005 84.1 30.7 84.2 0.1 2006 85.2 30.5 84.4 -0.8 2007 86.5 30.2 84.6 -1.9 2008 86 31.2 85.7 -0.3 2009 85.2 28.7 84.2 -1 2010 86.5 29.2 86.2 -0.3

Source; OPEC, 2011 3.3.2 Spare capacity; Oil spare capacity and stock act as buffet to the supply shortage and immediate demand need in the short run. Producing crude oil at a maximum level there is a danger that oil industry will not respond quickly to supply shortage at short time basis. Crises in Libya, Yemen, Bahrain and Syria have a significant impact to daily oil production and have to be covered by other countries in order to stabilise the market supply of the oil, Murphy (2011). 3.3.3 External shocks; Any interference in the world smooth run and macroeconomic shocks will have direct imparted to the world oil supply, Burger, el at., (2010). It might be disturbance or accident in oil production site like that of oil spill in Gulf of Mexico in 2010, wars like what happening now in Libya, and other Middle East countries. It is also include any activities relating to terrorist but also it can include world macroeconomics shocks like recessions and etc. Figure: 9 Impacts of shock to world crude oil production

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Sources; IEA as cited by Samuelson, 2005 From figure: 10 above, it is clear that supply of the oil is affected by shocks hence the price of oil is responding to the news of the shock, mostly long term prices or future contracts to be specific. These contracts they are depending on investors perceptions of the market and its future trends. 3.3.4 Long term perspectives; In the long run reserves level (volume) of the oil have significant role in predicting the future market prices the crude oil, the lesser the stock or reserves does oil industry has the lesser the attractive to the investors and hence price will automatically respond to this. Figure: 10 OPEC Surplus Crude Oil Production Capacity

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Source; EIA, 2011 Looking figure; 11 and table; 1 on page 4 it is clearly that crude oil reserves is diminishing and will have impact to the world crude oil production and prices, on average bases, oil remain will last for the next 54 year to come unless there is new explorations. Crude oil exploration is the process involves the geological and technical study of detecting crude oil in the earth; it is only worth to continue in investing in exploration if the price of crude oil is rising and good enough to outweigh the exploration costs and crude oil found is expected to last longer. Drilling is part of crude oils cost of productions, the higher the drilling costs the higher the cost to final product, hence any uses of technology to lower the drilling costs will have higher impact the final prices of the oil. One example is the new QuikFRAC system, which is a set of tools capable of simultaneously stimulating multiple stages with a single fracture treatment (batch fracturing). The main implication of this new QuickFRAC technology is that it can pump three times as much oil in a given time period compared to conventional fracking methods, and therefore reduces the time spent drilling by two-thirds, Perry (2011. p.1). 3.3.5 Tanker market;

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Tanker market perhaps the most volatile market in shipping industry, is depending on world oil market, if there is no demand for oil or oil being entirely transported by pipeline if possible, then not need for tanker ships at all. To put in simple terms, demand for tankers is function of world oil market, an oil market is the one which decide how much of crude oil and refined products ready to be transported using tankers. While source of oil production, refining and consumption, are ones to determine the distance over which oil are transported. Basically, tanker market among other factors is depending on existing fleet size, constructions of new tankers, removal of vessels for scrapping and conversion of single hull tanker into other form. Table no; 3 Tanker market and world economic (GDP) 2005 2006 2007 2008 2009 World GDP (%) 4.6 5.2 5.3 2.8 -0.5 World crude oil seaborne imports (mbd) 37.9 38.8 39.8 39.5 38 World tanker fleet capacity (mill-dwt) 343.5 362.8 382.8 404.2 432.7 New building deliveries (mill-dwt) 29.8 26.0 30.8 36.4 48.4 Scrapping (mill-dwt) 4.0 3.0 3.4 4.1 8.5 Sources: Bulk Shipping consultants (2011), RS Platou (2010), IMF(2010), IEA (2011)

2010 4.9 39.5 452.6 41.2 12.7

Tankers have double role in the crude oil market, on supply side its dead weight capacity is important to stabilize supply and demand of the crude oil, when tanker market is less capable to transporting all available oil to where it is required, it will create shortage of oil supply and hence oil prices will go up, not only that but also oil will be very expense because of high freight rates will be absorbed into final price of the oil as many producers will fight to have limited tanker capacity. Looking on table 4 below, it is clearly that suppliers are controlling both tanker market and oil market by producing just enough to cover the market demand and hence excessive tanker capacity has to remain idle, option is to scrap or convert into other forms of uses. Also from figure 11 Baltic index predict slightly improvement in tanker market by 2011 but still is gambling situation to tankers owners.

Table no; 4 Demand and supply of the world crude Oil: 2010-2011 Mill barrel per day 2010 2011 Est.- 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hamad B. Hamad MBA in Maritime Management (000455020) Page 14

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Demand (a) Supply (b) Difference (b-a) Source: OPEC, 2011

85.2 85.4 87.7 87.9 87.1 86.7 87.25 87.1 85.9 85.9 85.9 87.1 87.7 87 87.3 87.33 0.7 0.5 -1.8 -0.8 0.6 0.3 0.05 0.23

Figure: 11. Baltic Dry Index 2001-2010

Source; Baltic exchange as cited by Bornozis, 2010

4. Conclusion: From the above discussion, it is clear that oil market is under stress and is highly volatile to the extent that is not easy to have clear predictions of what going to hit oil market next morning. Oil market has many drivers which at any time could trigger market to change. On a supply side which is controlled by oil producers is depending on political stability, tanker capacity, general world economic conditions and demand for oil while on demand side, factors like oil stock reserves, cyclical demand, prices of substitutes and etc. in order to control the oil prices supply and demand have at least to balance so as the oil price (spot

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market) to be at equilibrium or market price, but this is rarely happing in oil market as mostly prices are controlled by speculators. Spot price of World crude oil have been experiencing stead increasing in the first and second quota of 2011 due to political unrest in the Arab countries including Egypt and currently in Libya. Spot price as at 12th April 2011 was $126/bbl, Brent (2011) and $112/bbl, WTI (2011). General prices went up by 10-15% from March to April. Oil Supply has been affected somehow; suppliers like Syria, Bahrain, and Libya even are in political instability hence countries like Libya failed even to put its production in the world market (Libya produce 1.7 mbp under OPEC basket price policy). From this fact, total world supply went short by 0.7 mb/d, importantly, OPEC president insist that no more additional production from OPEC, Mirkazeme (2011). However so far OPEC production of oil increased by 0.2 mb/d, this has also influenced oil prices and giving OPEC even more monopoly power. There is also indication that world crude oil reserves went down by 50.8 million barrel in February, OPEC (2011). However, total OPEC reserves increase a bit but expected to have sharp decline from 2012 (see figure: 10, page 14) World crude oil demand has relatively unchanged for past two-three years; on average world consume 87.1 mb/d of crude oil. Japan is likely going to use more fuel to run its power plant following significant failure of its nuclear plant on tsunami disaster, also Chinese economic bullish insist on more oil demanding, weak euro and strong dollar have also impacted oil market where investors believes market will be favorable to invest just in near future. Hence oil demand per day is expected even to go up. Tanker Freight market shows a little bit declining after shipping market realized that there is excess of tanker capacity, supply of tanker exceed its demand hence some of them are idle. This is not good news to the oil market as the freight rate going to be increase later on following massive numbers of scrapped tankers and some converted into other uses. From this end, the author of this essay is estimating that demand for crude oil in quota 3 and 4 of 2011 will be 88.6 and 88.9 respectively higher than previous quotas. (Using moving average at 3 number steps) oil prices in future markets will be anything between $ 122 and

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$135 per barrel, higher than the previous quotas. Putting all other factors together, Japan and uprising in Arabs nations likely the crude oil will be expensive products in the market.

5. Reference: Andrews, A., et al., 2010. The U.S. Oil Refining Industry: Background in Changing Markets and Fuel Policies. Accessed on November 22, 2010, R41478. Available at: http://www.crs.gov

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Ball, L & Mankiw, N. G. 1995. Relative-Price Changes as Aggregate Supply Shocks. Oxford Journals, Economics & Social Sciences, Quarterly Journal of Economics, Volume110, Issue1, Pp. 161-193. Available at: http://qje.oxfordjournals.org/content/110/1/161.short Berkemen, P. 2005. The Structure of the Oil Market and Causes of High Prices. International Monetary Fund (IFM) Available at:

http://www.imf.org/external/np/pp/eng/2005/092105o.htm Blanchard, O. J & Quah, D. 1990. The Dynamic Effects of Aggregate Demand and Supply Disturbances. Issued in March 1990. NBER Working Paper No. 2737 The American Economic Review, Vol. 79, No. 4, pp. 655-673. Available at:

http://www.nber.org/papers/w2737 Bornozis, N. 2010. A review of global shipping market: Greek a global shipping leader. Available at: http://www.CapitalLinkShipping.com Bulk Shipping Consultants, 2011. Handouts and class notes. Greenwich Maritime Institute. Dargay, J. M. 2007. Price and Income Responsiveness of World Oil Demand, by Product. Institute for Transport Studies, University of Leeds, and Available at:

http://www.econ.nyu.edu/dept/courses/gately/OilDemand.pdf EIA (Energy Information Agency), 2010. Factors affecting the relationship between crude oil and natural gas prices. Annual Energy Outlook 2010 with Projections to 2035. Issues in Focus, AEO2010. Available at:

http://www.eia.doe.gov/oiaf/aeo/otheranalysis/aeo_2010analysispapers/factors.html Gisser, M & Goodwin, T. H. 1986. Crude Oil and the Macroeconomic: Tests of Some Popular Notions: Journal of Money, Credit and Banking. Vol. 18, No. 1 (Feb., 1986), pp. 95-103. Available at: http://www.jstor.org/stable/1992323. Ohio State University Press Hamilton, J. D. 2008. "Understanding Crude Oil Prices," The Energy Journal, International Association for Energy Economics, vol. 30(2), pages 179-206. NBER Working Paper No. 14492. Available at; http://www.nber.org/papers/w14492 Hamad B. Hamad MBA in Maritime Management (000455020) Page 18

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Hochman, G, et al (2010). The effect of biofuels on crude oil markets. AgBioForum, 13(2), 112-118. Available on the World Wide Web: http://www.agbioforum.org. University of California-Berkeley Hyes, J, et al. 2005. Market definition in crude oil. Estimating effects of BP/ARCO merger. The Antitrust Bulletin. Vol. 52, No. 2/summer 2007. Available at:

http://faculty.haas.berkeley.edu/shapiro/crudeoil.pdf Interanational Monetary Fund (IMF), 2011.World Economy outlook. Accessed on 25 th January, 2011. Available at: http://www.ifm.org International Energy Agency (IEA) 2011. Oil market report. Accessed on 12 th April, 2011. Available at: http://www.oilmarketreport.com Mobert, J. 2007. Oil Prices Determinates. Darmstadt Discussion Papers in Economics. 186 (2007-08). RePEc: dar: ddpeco: 35713. Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) Moosa, I. A & Al-Loughani, N. 2002. Unbiasedness and time varying risk premia in the crude oil futures market. Energy Economics, Volume 16, Issue 2, April 1994, Pages 99105. Available at: http://www.sciencedirect.com/science Murphy, R. 2011. The Significance of Spare Oil Capacity. Available:

http://www.instituteforenergyresearch.org/2011/04/14/the-significance-of-spare-oilcapacity/ Institute of Energy Research. Organisation of the Petroleum Exporting Countries (OPEC). 1960. OPEC Statute. Available at: http://www.opec.org/opec_web/static_files_project/media/downloads/publications/OS. pdf Perry, M. J. 2011. The Race Is On: Drilling Technology v. Rising Oil Prices. Accessed on: April 17th. Available at: http://advisoranalyst.com/glablog/2011/04/17/the-race-is-ondrilling-technology-v-rising-oil-prices/ AdvisorAnalyst .com

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Rahim, A.S, et al., 2010. Short run and long run effects of the world crude oil prices on the Malaysian natural rubber and palm oil export prices. Volume 7, No.1 (Serial No.51) Journal of US-China Public Administration, ISSN 1548-6591, USA Rifflart, C & Chevillon, G. 2008. Physical market determinates of the price of crude oil and the market premium. Available at:

http://www.essec.edu/faculty/showDeclFileRes.do?declId=8195&key=PublicationContent Riley, G. 2006. AS Markets & Market Systems: Market for Oil. Available at: http://tutor2u.net/economics/revision-notes/as-markets-oil.html . Eton College RS Platou, 2011. RS Platou economic research: accessed on January 2011. Available at: http://www.Platou.com Samuelson, R. 2005. Oil Price Assumptions and Scenarios. Workshop: Assumptions and Scenarios for the New Zealand Energy Outlook Ralph Samuelson 17 November 2005. Available at: http://www.med.govt.nz/upload/27057/oil-prices.pdf Silvapulle, P & Moosa, I. A. 1999. The relationship between spot and futures prices: Evidence from the crude oil market. Volume 19, Issue 2, pages 175193, April 1999. Available at: http://www.onlinelibrary.wiley.com/doi/10.1002 Singh, A. 2011. Key determinants of rising prices of crude oil. Accessed on; February 21, 2011. Available at: http://www.business-standard.com Smith, V. L. 1962. An experimental study of competitive market behaviour. The Journal of Political Economy Vol. 70, No. 2 (Apr., 1962), pp. 111-137. The University of Chicago Press. Available at: http://www.jstor.org/stable/1861810 Stuart, S. 2011. Chinese Oil Consumption Growth. Early warning, risk to global civilisation. Accessed on: January 25, 2011. Available at:

http://earlywarn.blogspot.com/2011/01/chinese-oil-consumption-growth.html

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Thisismoney,

2011.

Latest

oil

prices

and

historical

charts.

Available

at:

http://www.thisismoney.co.uk/oil-price Toth, F. L & Rogner, H. 2004. Oil and nuclear power: Past, present, and future. Energy Economics 28 (2006) 1 25. Planning and Economic Studies Section, Department of Nuclear Energy. International Atomic Energy Agency (IAEA), Available at:

http://www.sciencedirect.com Vienna, Austria Wenzhang, W. 2011. China Steel Industry to Keep Stable Growth in Next Five Years. Shanghai Steel. India, March, 2011, Shanghai steel home. Available at:

http://www.steelhome.com Mirkazeme, M. 2011. Accessed on May, 2011. No more additional production of oil from OPEC. Available at: http://www.liveoilprices.co.uk/oil/category/oil-price-forecast

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