OIL Flashcards
what is the approx. % of oil in providing total energy
33%
What are some secondary effects of a rise in oil prices
gasoline, global recession, stagflation in the 70s, transfers wealth from imprters to exporters, PPL thought it would cause American decline in 1990s
why is it important that there is a single global market for oil
even if usa is oil independent, Mid east and china are still key in oil prices,
US consumption is down from 2005 levels why?
weak economy, effeciency
what are some characteristics about the demand for oil
inelastic, demand shifts are often the cause fo price changes
who is a key player in rising oil prices recently
ASIA and BRIC especially if you ask Michael LEvi
Who are some of the big oil producers
OPEC, Russia, USA (now #1)
what casued investment in shale to pick up in the USA
price shocks from the Iraq war, 9/11, demand growth in developing world
What percentage of world oil reserves does opec control
80% leads to cartel manipulating prices
What makes Saudi Arabia a swing producer
reserve capacity, can threaten price wars against non-conforming members of OPEC, influence waning b/c shale
What are the implications of the USA becoming more energy independent
unrest in financially troubled middle east, US draw back on security in middle east, Saudis not as important, Chinese care more about middle east than we do
ALL this b/c of techno innovation
Why did the OPEC deal fall apart in Doha
Iran didnt show up
Why doesnt Iran come to the table
they are trying to get back to presanction levels
Saudis wont doa deal without Irand and Iran and Saudis fighting proxy wars
true
Who is on the hook in USA with low oil prices
Shale producers (higher costs of production), wall street b/c loaned to shale producers.
