9. Energy Products

Question 1

What does the energy products market include?

Answer 1

Refined oil and Natural gases

Question 2

Explain the availability of oil and gas.

Answer 2

Supply is finite - countries with surplus reserves are to export to those countries with shortfalls to meet their requirements.

Question 3

How could prices increase

Answer 3

By major oil producer in OPEC reducing supply

Question 4

What is Europes largest Exchange?

Answer 4

Intercontinental Exchange (ICE)

Question 5

How can energy prices react to political crises?

Answer 5

Sharply, especially in major oil producing regions, such as the Middle East

Question 6

What is a prime example of political unrest affecting energy prices?

Answer 6

The Russia Ukraine War 2022 - sanctions on Russia suppressed the supply of oil, and thus prices rose sharply.

Question 7

Crude Oil is defined by what 3 primary factors

Answer 7

Field of Origin eg Brent, West Texas, Dubai
Density - eg low density or “light” or high density “heavy”
Sulphur content - low sulphur “sweet” or high sulphur “sour”

Question 8

What are the the three unique features of electricity markets?

Answer 8

1. Electricity cannot be easily stored - so difficult to maintain large inventory
2. Difficult to transport without loss - can lead to areas where delivery is not viable.
3. Subject to large price movements - variation in seasonal demand (heating and air conditioning)