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Week 11 - Oil Industry Flashcards

1
Q

1.
What is the main reason why Alberta does not receive the same prices for its oil as benchmark prices like West Texas Intermediate (WTI) or Brent? a. Alberta’s oil production is too low. b. The quality and location of Alberta’s oil make it less valuable. c. There is no demand for Alberta’s oil. d. Alberta has no access to pipelines for transportation.

A

b. The quality and location of Alberta’s oil make it less valuable.

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2
Q

Which of the following factors influence the price of oil? a. Type of oil b. Location of production c. Transportation costs d. All of the above

A

d. All of the above

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3
Q

Why does Brent oil generally command higher prices in the global market? a. It is a heavy oil with high viscosity. b. It is primarily produced in landlocked areas. c. It is a light, sweet oil with easy access to coastal ports for global transportation. d. It is subject to strict export restrictions.

A

c. It is a light, sweet oil with easy access to coastal ports for global transportation.

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4
Q

What is one reason why WTI oil trades at a discount to Brent oil? a. WTI oil is of lower quality than Brent oil. b. The US, where most WTI is produced, restricts crude oil exports. c. WTI oil production has significantly declined in recent years. d. There is limited demand for WTI oil globally.

A

b. The US, where most WTI is produced, restricts crude oil exports.

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5
Q

What is Western Canada Select (WCS)? a. A type of light, sweet crude oil produced in Alberta. b. A benchmark price for oil produced in the United States. c. A blend of heavy oil, bitumen, and diluents produced in Canada. d. A type of oil exclusively extracted from oil sands.

A

c. A blend of heavy oil, bitumen, and diluents produced in Canada

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6
Q

Why is WCS priced at a discount to WTI? a. WCS is lighter than WTI and located closer to major markets. b. WCS production exceeds demand, leading to a surplus. c. WCS has higher transportation costs due to pipeline limitations. d. WCS is heavier than WTI and located further away from main markets.

A

d. WCS is heavier than WTI and located further away from main markets.

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7
Q

What is “dilbit”? a. A type of diluent used to thin heavy oil. b. A high-quality crude oil blend similar to Brent. c. A blend of bitumen and diluents to facilitate pipeline transport. d. A synthetic oil produced from natural gas.

A

c. A blend of bitumen and diluents to facilitate pipeline transport.

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8
Q

What is meant by the term “bitumen netback”? a. The total cost of producing and transporting bitumen. b. The price of bitumen at the point of extraction. c. The theoretical price of bitumen after deducting transportation costs. d. The profit margin for bitumen producers.

A

c. The theoretical price of bitumen after deducting transportation costs.

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9
Q

.
How do price discounts for Alberta’s oil impact the province’s royalties? a. Lower oil prices result in lower royalty revenues for Alberta. b. Price discounts have no impact on royalty calculations. c. Price discounts increase the overall value of Alberta’s oil resources. d. Lower prices encourage higher production to compensate for revenue loss.

A

a. Lower oil prices result in lower royalty revenues for Alberta

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10
Q

According to the sources, what is one way to potentially reduce price discounts for Alberta’s oil? a. Increase production of heavy oil to meet global demand. b. Invest in research to improve the quality of Alberta’s oil. c. Improve access to markets to facilitate easier transportation of oil. d. Negotiate higher prices with international buyers.

A

c. Improve access to markets to facilitate easier transportation of oil.

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11
Q

.
What is the main reason why Alberta does not receive the same prices for its oil as benchmark prices like West Texas Intermediate (WTI) or Brent? a. Alberta’s oil production is too low. b. The quality and location of Alberta’s oil make it less valuable. c. There is no demand for Alberta’s oil. d. Alberta has no access to pipelines for transportation.

A

b. The quality and location of Alberta’s oil make it less valuable.

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12
Q

Which of the following factors influence the price of oil? a. Type of oil b. Location of production c. Transportation costs d. All of the above

A

d. All of the above

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13
Q

Why does Brent oil generally command higher prices in the global market? a. It is a heavy oil with high viscosity. b. It is primarily produced in landlocked areas. c. It is a light, sweet oil with easy access to coastal ports for global transportation. d. It is subject to strict export restrictions.

A

c. It is a light, sweet oil with easy access to coastal ports for global transportation

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14
Q

What is one reason why WTI oil trades at a discount to Brent oil? a. WTI oil is of lower quality than Brent oil. b. The US, where most WTI is produced, restricts crude oil exports. c. WTI oil production has significantly declined in recent years. d. There is limited demand for WTI oil globally.

A

b. The US, where most WTI is produced, restricts crude oil exports.

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15
Q

What is Western Canada Select (WCS)? a. A type of light, sweet crude oil produced in Alberta. b. A benchmark price for oil produced in the United States. c. A blend of heavy oil, bitumen, and diluents produced in Canada. d. A type of oil exclusively extracted from oil sands.

A

c. A blend of heavy oil, bitumen, and diluents produced in Canada

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16
Q

Why is WCS priced at a discount to WTI? a. WCS is lighter than WTI and located closer to major markets. b. WCS production exceeds demand, leading to a surplus. c. WCS has higher transportation costs due to pipeline limitations. d. WCS is heavier than WTI and located further away from main markets.

A

d. WCS is heavier than WTI and located further away from main markets.

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17
Q

What is “dilbit”? a. A type of diluent used to thin heavy oil. b. A high-quality crude oil blend similar to Brent. c. A blend of bitumen and diluents to facilitate pipeline transport. d. A synthetic oil produced from natural gas.

A

c. A blend of bitumen and diluents to facilitate pipeline transport.

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18
Q

What is meant by the term “bitumen netback”? a. The total cost of producing and transporting bitumen. b. The price of bitumen at the point of extraction. c. The theoretical price of bitumen after deducting transportation costs. d. The profit margin for bitumen producers.

A

c. The theoretical price of bitumen after deducting transportation costs.

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19
Q

How do price discounts for Alberta’s oil impact the province’s royalties? a. Lower oil prices result in lower royalty revenues for Alberta. b. Price discounts have no impact on royalty calculations. c. Price discounts increase the overall value of Alberta’s oil resources. d. Lower prices encourage higher production to compensate for revenue loss.

A

a. Lower oil prices result in lower royalty revenues for Alberta.

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20
Q

According to the sources, what is one way to potentially reduce price discounts for Alberta’s oil? a. Increase production of heavy oil to meet global demand. b. Invest in research to improve the quality of Alberta’s oil. c. Improve access to markets to facilitate easier transportation of oil. d. Negotiate higher prices with international buyers.

A

c. Improve access to markets to facilitate easier transportation of oil.

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21
Q

What was the primary business of Anglo-Persian Oil in its early years? a. Oil refining b. Oil exploration and production c. Chemicals and plastics production d. Marketing and distribution

A

b. Oil exploration and production

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22
Q

.
Why did the British government invest in Anglo-Persian Oil in 1914? a. To nationalize the oil industry b. To prevent a foreign takeover c. To secure fuel oil supplies for the Royal Navy d. To support the development of the Persian economy

A

c. To secure fuel oil supplies for the Royal Navy

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23
Q

What was a significant outcome of World War I for Anglo-Persian Oil? a. The company’s assets were nationalized by Persia. b. The company expanded its operations and became a major player in the global oil industry. c. The company faced severe financial losses due to the war’s disruptions. d. The company shifted its focus from oil production to refining and marketing.

A

b. The company expanded its operations and became a major player in the global oil industry.

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24
Q

What triggered the nationalization of the Iranian oil industry in 1951? a. The discovery of vast new oil reserves in Iran b. A dispute over the ownership of the Anglo-Iranian Oil Company c. Growing Iranian nationalism and dissatisfaction with the company’s profit-sharing arrangements d. The outbreak of the Cold War and tensions between the West and the Soviet Union

A

c. Growing Iranian nationalism and dissatisfaction with the company’s profit-sharing arrangements

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25
Q

How did BP respond to the loss of its Iranian oil assets in the 1950s? a. By focusing solely on its existing operations in Iraq and Kuwait b. By exiting the oil production business and concentrating on refining and marketing c. By increasing production in other regions and diversifying into petrochemicals d. By forming a cartel with other major oil companies to control global oil prices

A

c. By increasing production in other regions and diversifying into petrochemicals

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26
Q

What major oil discoveries in the late 1960s transformed BP’s future? a. Discoveries in the Middle East, particularly in Saudi Arabia b. Discoveries in South America, notably in Venezuela c. Discoveries in Alaska and the North Sea d. Discoveries in Africa, specifically in Nigeria and Libya

A

c. Discoveries in Alaska and the North Sea

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27
Q

What was the purpose of BP’s Project 1990? a. To expand the company’s operations into renewable energy sources b. To acquire new oil and gas reserves in emerging markets c. To streamline the company’s structure and reduce costs d. To improve employee morale and foster a more collaborative work environment

A

c. To streamline the company’s structure and reduce costs

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28
Q

.
What was the primary criticism of Robert Horton’s leadership during Project 1990? a. His focus on acquisitions led to the accumulation of excessive debt. b. He failed to adequately invest in exploration and production activities. c. His cost-cutting measures were seen as too aggressive and damaging to employee morale. d. He neglected the company’s environmental responsibilities.

A

c. His cost-cutting measures were seen as too aggressive and damaging to employee morale.

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29
Q

9.
What were some of the key strategies implemented by BP’s new management team in the mid-1990s? a. Reversing the cost-cutting measures of Project 1990 and increasing employee benefits b. Focusing solely on upstream activities and divesting all downstream assets c. Divesting non-core assets, reducing debt, and forming strategic partnerships d. Relocating the company’s headquarters from London to Houston to be closer to its US operations

A

c. Divesting non-core assets, reducing debt, and forming strategic partnerships

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30
Q

What was the overall impact of the restructuring efforts undertaken by BP in the 1990s? a. The company’s financial performance declined, leading to further job cuts. b. The company became more bureaucratic and less responsive to market changes. c. The company shifted its focus away from oil and gas and towards renewable energy. d. The company’s financial performance improved, and it became more efficient and competitive.

A

d. The company’s financial performance improved, and it became more efficient and competitive.

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31
Q

What is the main focus of the article “Forks in the Road: Energy Policies in Canada and the US since the Shale Revolution”? a. The history of oil discoveries in North America. b. The impact of environmental regulations on oil production. c. The divergent energy policies of Canada and the US following the shale revolution. d. The role of OPEC in global oil markets.

A

c. The divergent energy policies of Canada and the US following the shale revolution.

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32
Q

.
How has the shale revolution affected the US’s position in the global oil market? a. The US has become a net importer of oil. b. The US has reduced its reliance on foreign oil imports due to increased domestic production. c. The shale revolution has had no significant impact on the US’s oil production. d. The US has become the sole supplier of oil to Canada.

A

(b) The US has reduced its reliance on foreign oil imports due to increased domestic production.

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33
Q

What has been the primary challenge for Canada’s energy sector in recent years? a. Declining global demand for oil. b. Difficulty in attracting foreign investment. c. Limited pipeline capacity to transport oil to international markets. d. Competition from renewable energy sources.

A

c. Limited pipeline capacity to transport oil to international markets.

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34
Q

What was the main objective of the National Energy Program (NEP) implemented by Canada in 1980? a. To encourage foreign investment in the Canadian energy sector. b. To promote the development of renewable energy sources. c. To increase oil exports to the United States. d. To achieve Canadian energy independence and control over domestic oil prices.

A

d. To achieve Canadian energy independence and control over domestic oil prices.

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35
Q

Why did the US government historically support the integration of Canada’s energy resources into the North American market? a. To reduce Canada’s dependence on OPEC oil. b. To promote economic development in Canada. c. To secure a reliable and stable source of oil from a trusted ally. d. To create a North American energy cartel to control global oil prices.

A

c. To secure a reliable and stable source of oil from a trusted ally

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36
Q

What was a major turning point in the relationship between Canada and the US regarding energy policy? a. Canada’s implementation of the NEP in 1980. b. The signing of the Canada-US Free Trade Agreement (CUSFTA) in 1988. c. The discovery of major oil reserves in the Canadian Arctic in the 1990s. d. The shale revolution and the Obama administration’s opposition to the Keystone XL pipeline.

A

d. The shale revolution and the Obama administration’s opposition to the Keystone XL pipeline.

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37
Q

How did the US government respond to the increased domestic oil production resulting from the shale revolution? a. It imposed restrictions on domestic oil production to stabilize prices. b. It nationalized the oil industry to control production and distribution. c. It passed legislation and invested in infrastructure to support the expansion of oil production and transportation. d. It focused on developing renewable energy sources to reduce reliance on fossil fuels.

A

c. It passed legislation and invested in infrastructure to support the expansion of oil production and transportation.

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38
Q

What is the current status of the Keystone XL pipeline project? a. The project was completed and is currently operational. b. The project was cancelled by the Canadian government due to environmental concerns. c. The project has faced numerous delays and legal challenges and is not yet operational. d. The project is under construction and is expected to be operational within the next year.

A

c. The project has faced numerous delays and legal challenges and is not yet operational.

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39
Q

What factors have contributed to the “policy paralysis” in Canada’s energy sector in recent years? a. Lack of government support for oil and gas development. b. Declining global demand for Canadian oil. c. Political debates surrounding climate change, Indigenous rights, and pipeline approvals. d. Technological advancements in renewable energy production.

A

c. Political debates surrounding climate change, Indigenous rights, and pipeline approvals.

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40
Q

What is the main conclusion drawn by the authors regarding the future of energy policies in Canada and the US? a. They predict a convergence of energy policies as both countries prioritize renewable energy development. b. They anticipate increased cooperation between Canada and the US to develop a continental energy strategy. c. They argue that Canada will become increasingly reliant on the US as its sole export market for oil. d. They acknowledge the uncertainty surrounding the future direction of energy and environmental policies in both countries

A

d. They acknowledge the uncertainty surrounding the future direction of energy and environmental policies in both countries.

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41
Q

What was the primary motivation behind the formation of OPEC in 1960? a. To promote the development of renewable energy sources. b. To nationalize the oil industries of member countries. c. To coordinate energy policies and stabilize global oil prices. d. To establish a monopoly over the global oil market.

A

c. To coordinate energy policies and stabilize global oil prices.

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42
Q

Which countries were the founding members of OPEC? a. Saudi Arabia, Iraq, Kuwait, Libya, and Venezuela. b. Iran, Iraq, Kuwait, the United Arab Emirates, and Algeria. c. Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. d. Qatar, Indonesia, Libya, Algeria, and Nigeria.

A

c. Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela

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43
Q

What challenge did OPEC face in its early years (1960s)? a. A lack of demand for oil due to the rise of renewable energy. b. Competition from the Seven Sisters, the dominant oil companies at the time. c. Internal conflicts among member countries regarding production quotas. d. The discovery of major oil reserves outside of OPEC member countries.

A

c. Internal conflicts among member countries regarding production quotas.

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44
Q

What event led to the first major oil crisis in 1973? a. The Iranian Revolution. b. The Iraqi invasion of Kuwait. c. The Yom Kippur War and the subsequent oil embargo by Arab OPEC members. d. The collapse of the Soviet Union.

A

c. The Yom Kippur War and the subsequent oil embargo by Arab OPEC members.

45
Q

What was the significance of the 1973 oil embargo? a. It demonstrated OPEC’s absolute control over the global oil market. b. It led to the collapse of Western economies and the rise of OPEC nations. c. It highlighted OPEC’s ability to influence global politics and economics through oil supply manipulation. d. It resulted in the permanent decline of oil consumption in industrialized countries.

A

c. It highlighted OPEC’s ability to influence global politics and economics through oil supply manipulation.

46
Q

.
How did countries reliant on OPEC oil respond to the rising prices and supply disruptions in the 1970s and 1980s? a. They intensified their efforts to expand oil exploration within OPEC territories. b. They formed strategic alliances with OPEC countries to secure favorable oil prices. c. They sought alternative energy sources such as coal, nuclear power, and natural gas. d. They nationalized the assets of Western oil companies operating within their borders.

A

. c. They sought alternative energy sources such as coal, nuclear power, and natural gas.

47
Q

What factors contributed to the decline of OPEC’s market share in the 1980s? a. A decrease in global oil demand due to economic recessions. b. The discovery and development of major oil fields in regions like Alaska and the North Sea. c. OPEC’s decision to increase production to flood the market and lower prices. d. Both a and b.

A

d. Both a and b.

48
Q

What impact did the Iran-Iraq War (1980-1988) have on the global oil market? a. It led to a sharp decline in global oil prices due to oversupply. b. It strengthened OPEC’s unity and control over oil production quotas. c. It resulted in supply disruptions from Iran, but other OPEC members increased production to offset the shortfall. d. It had no significant impact on the global oil market as other producers readily filled the gap.

A

c. It resulted in supply disruptions from Iran, but other OPEC members increased production to offset the shortfall.

49
Q

.
What was the main reason behind Iraq’s invasion of Kuwait in 1990? a. Kuwait’s support for Israel during the Yom Kippur War. b. Territorial disputes dating back to the Ottoman Empire. c. Iraq’s desire to control Kuwait’s oil reserves and increase its own production. d. Iraq’s attempt to prevent Kuwait from joining the US-led coalition against it.

A

c. Iraq’s desire to control Kuwait’s oil reserves and increase its own production.

50
Q

0.
How has OPEC’s influence on the global oil market evolved since the 1990s? a. OPEC has maintained its dominant position and continues to dictate global oil prices unilaterally. b. OPEC’s influence has waned significantly due to the rise of renewable energy sources and the decline of global oil demand. c. OPEC still plays a significant role but faces challenges from non-OPEC producers and geopolitical factors. d. OPEC has transformed into a global energy organization promoting cooperation between oil producers and consumers.

A

c. OPEC still plays a significant role but faces challenges from non-OPEC producers and geopolitical factors

51
Q

What is the primary factor influencing crude oil prices? a. Government regulations b. Technological advancements in oil extraction c. Global supply and demand d. Speculation in futures markets

A

c. Global supply and demand

52
Q

According to the source, what is the connection between economic growth and demand for petroleum products? a. Economic growth leads to reduced demand for petroleum products as countries transition to renewable energy. b. Economic growth has a negligible impact on petroleum product demand. c. Economic growth increases demand for energy, particularly in the transportation sector, which heavily relies on petroleum products. d. Economic growth primarily affects the demand for electricity, not petroleum products.

A

c. Economic growth increases demand for energy, particularly in the transportation sector, which heavily relies on petroleum products

53
Q

.
How much of the world’s total energy consumption is accounted for by petroleum products? a. One-tenth b. One-quarter c. One-third d. One-half

A

c. One-third

54
Q

How does the Organization of the Petroleum Exporting Countries (OPEC) influence oil prices? a. By controlling all global oil refineries b. By setting mandatory production limits for all oil-producing countries c. By establishing production targets for its member countries, which collectively hold a significant portion of global oil reserves. d. By investing in renewable energy sources to reduce global reliance on oil.

A

c. By establishing production targets for its member countries, which collectively hold a significant portion of global oil reserves.

55
Q

What is “call on OPEC”? a. The total amount of oil produced by OPEC countries b. The amount of oil consumed by OPEC countries c. The difference between global oil demand and supply from non-OPEC sources. d. The total revenue generated by OPEC countries from oil exports

A

c. The difference between global oil demand and supply from non-OPEC sources.

56
Q

.
Why is maintaining spare production capacity generally not cost-effective for international oil companies (IOCs)? a. Because IOCs prioritize environmental sustainability over profit maximization b. Because IOCs lack the necessary infrastructure to quickly increase oil production c. Because the IOC business model focuses on maximizing revenue by producing and selling oil as long as the selling price exceeds the production cost. d. Because IOCs primarily invest in renewable energy sources, not oil production

A

c. Because the IOC business model focuses on maximizing revenue by producing and selling oil as long as the selling price exceeds the production cost

57
Q

What is the U.S. Energy Information Administration’s (EIA) definition of “spare capacity”? a. The total amount of oil stored in strategic reserves b. The difference between a country’s proven oil reserves and its current production levels c. The volume of oil production that can be activated within 30 days and sustained for at least 90 days. d. The maximum amount of oil that can be extracted from existing oil fields using current technology

A

c. The volume of oil production that can be activated within 30 days and sustained for at least 90 days.

58
Q

Why do geopolitical events and severe weather affect crude oil and petroleum product prices? a. They often lead to discoveries of new oil reserves, increasing supply and lowering prices b. They increase the cost of oil extraction and transportation, leading to higher prices. c. They can disrupt the supply chain, creating uncertainty and volatility in the market. d. They encourage consumers to switch to alternative energy sources, reducing demand and lowering prices.

A

c. They can disrupt the supply chain, creating uncertainty and volatility in the market.

59
Q

.
Which of the following historical events did NOT contribute to major oil price shocks? a. The Arab Oil Embargo (1973-74) b. The Iranian Revolution c. The Iran-Iraq War (1980s) d. The fall of the Berlin Wall (1989)

A

d. The fall of the Berlin Wall (1989)

60
Q

How does the availability of crude oil stocks and spare capacity impact the effect of potential supply disruptions? a. High stocks and spare capacity can exacerbate price increases during disruptions. b. The level of stocks and spare capacity has no impact on price fluctuations during disruptions. c. Low stocks and spare capacity can amplify the price impact of a potential disruption. d. Supply disruptions always lead to significant price increases regardless of stock levels.

A

c. Low stocks and spare capacity can amplify the price impact of a potential disruption.

61
Q

What is the primary way that crude oil is traded? a. Barter system b. Futures markets c. Direct negotiations between governments d. Online auctions

A

b. Futures markets

62
Q

What is a futures contract in the context of oil trading? a. An agreement to buy or sell a specific quantity of oil at an unspecified price on a future date. b. A prediction of future oil prices based on market analysis. c. A government-issued permit allowing companies to extract a certain amount of oil. d. A standardized agreement to buy or sell a specified quantity and quality of oil at a predetermined price on a specific date in the future.

A

d. A standardized agreement to buy or sell a specified quantity and quality of oil at a predetermined price on a specific date in the future.

63
Q

What is a spot transaction in the oil market? a. A long-term contract for oil delivery over several years. b. A futures contract with a delivery date more than one year in the future. c. An immediate purchase of a single oil shipment at the current market price. d. A trade involving a small quantity of oil, typically less than 1,000 barrels.

A

c. An immediate purchase of a single oil shipment at the current market price.

64
Q

Which of the following EIA publications provides projections for crude oil prices? a. Short-Term Energy Outlook b. Monthly Energy Review c. International Energy Outlook d. Natural Gas Monthly

A

a. Short-Term Energy Outlook

65
Q

What makes Brent oil a global benchmark?2.
a. It is a heavy oil, making it cheaper to produce. b. It is geographically isolated, making it exclusive. c. It is easily transported globally due to its location near coastal ports. d. It is primarily used in the United States and Canada.

A

c. It is easily transported globally due to its location near coastal ports.

66
Q

Why is WTI oil priced lower than Brent oil?4.
a. WTI oil is primarily produced in landlocked areas, increasing transportation costs. b. WTI oil is heavier than Brent oil, requiring more refining. c. The U.S. encourages crude oil exports, leading to oversupply. d. WTI oil is produced in smaller quantities than Brent oil.

A

a. WTI oil is primarily produced in landlocked areas, increasing transportation costs.

67
Q

.
How does the price of Western Canada Select (WCS) compare to WTI?6.
a. WCS is priced higher than WTI due to its higher quality. b. WCS is priced lower than WTI because it is heavier and further from main markets. c. WCS and WTI are priced similarly due to their proximity. d. WCS is a type of light oil, while WTI is a heavy oil.

A

. b. WCS is priced lower than WTI because it is heavier and further from main markets.

68
Q

What is “dilbit” and how is it priced in relation to WCS?8.
a. Dilbit is a light oil blend priced higher than WCS. b. Dilbit is a refined oil product priced the same as WCS. c. Dilbit is a blend of bitumen and diluents, priced lower than WCS due to its higher bitumen content. d. Dilbit is a synthetic oil priced independently of WCS.

A

c. Dilbit is a blend of bitumen and diluents, priced lower than WCS due to its higher bitumen content.

69
Q

What is the “bitumen netback” price?10.
a. The price of bitumen before transportation costs are deducted. b. The theoretical price of bitumen after deducting transportation costs. c. The global market price of bitumen, equivalent to Brent or WTI. d. The fixed price set by the Alberta government for bitumen.

A

b. The theoretical price of bitumen after deducting transportation costs.

70
Q

According to the source, what factors influence royalty payments to Alberta?12.
a. Global demand for renewable energy sources. b. The price received for resources and the cost of production and transportation. c. The quality of oil produced in other countries like the U.S. d. Speculation and trading in oil futures markets.

A

b. The price received for resources and the cost of production and transportation.

71
Q

Why are the prices Alberta receives for its oil lower than benchmark prices like Brent and WTI?14.
a. Alberta’s oil is of lower quality and located further from customers. b. Alberta has excessive access to markets, leading to oversupply. c. Alberta imposes high taxes on oil production, reducing profitability. d. Alberta prioritizes environmental sustainability over oil revenue.

A

a. Alberta’s oil is of lower quality and located further from customers.

72
Q

How does market access impact price discounts for Alberta’s oil?16.
a. Increased market access leads to greater price discounts. b. Improved access to global refineries reduces price discounts. c. Market access is irrelevant to the price discounts Alberta faces. d. Limited market access forces Alberta to sell its oil at higher prices.

A

b. Improved access to global refineries reduces price discounts.

73
Q

.
According to the source, why is not all oil priced equally? a. Government regulations set different price ceilings for different oil types. b. Heavier oils are more environmentally friendly, leading to higher demand and price. c. Factors such as oil type, production location, and transportation costs influence the price. d. Lighter oils are only produced in specific regions, making them rare and more expensive.

A

c. Factors such as oil type, production location, and transportation costs influence the price.

74
Q

Why do lighter oils typically command higher prices compared to heavier oils? a. Lighter oils are more scarce and geographically isolated. b. Refineries can process lighter oils more easily and cheaply. c. Heavier oils have higher transportation costs due to their viscosity. d. Lighter oils are primarily produced by OPEC countries, giving them more control over pricing.

A

b. Refineries can process lighter oils more easily and cheaply.

75
Q

Which of the following accurately describes the impact of an oil’s production location on its price? a. Oil produced near major cities tends to be cheaper due to reduced transportation costs. b. Oil production location has a minimal impact on price, as global demand is the primary driver. c. Proximity to refineries and transportation infrastructure affects the cost of delivering oil to consumers. d. Oil produced in politically unstable regions always receives a price premium due to supply risks.

A

c. Proximity to refineries and transportation infrastructure affects the cost of delivering oil to consumers

76
Q

Why does Brent oil, originating from the European North Sea, serve as a global benchmark? a. It is a heavy oil with high viscosity, preferred by many refineries. b. It is primarily produced and consumed within Europe, creating a stable regional market. c. Its accessibility to coastal ports allows for cost-effective transportation to worldwide markets. d. Brent oil has the highest sulfur content, making it a premium grade for specialized applications.

A

c. Its accessibility to coastal ports allows for cost-effective transportation to worldwide markets.

77
Q

What is a key factor that limits the global reach of West Texas Intermediate (WTI) oil? a. WTI oil is too light for most refining processes. b. Environmental regulations restrict the transportation of WTI oil outside North America. c. WTI oil production is declining rapidly, making it less attractive for international buyers. d. U.S. regulations generally prohibit the export of crude oil.

A

d. U.S. regulations generally prohibit the export of crude oil.

78
Q

What has contributed to the price discount of WTI oil compared to Brent oil in recent times? a. A decline in U.S. oil production has created a shortage in the Midwest. b. Increased pipeline capacity has led to oversupply of WTI oil at Cushing, Oklahoma. c. The U.S. has lifted restrictions on crude oil exports, flooding the global market with WTI. d. Demand for WTI oil has decreased globally due to its high sulfur content.

A

c. The U.S. has lifted restrictions on crude oil exports, flooding the global market with WTI.

79
Q

Why does Western Canada Select (WCS) oil trade at a discount to WTI? a. WCS is a light oil that requires less refining, making it less valuable. b. WCS production is concentrated in a single province, limiting its market reach. c. WCS is a heavy oil located further from major markets, increasing transportation costs. d. Canadian environmental regulations add significant costs to WCS production.

A

c. WCS is a heavy oil located further from major markets, increasing transportation costs

80
Q

.
How does “dilbit,” a blend commonly produced from oil sands, compare to WCS in terms of price? a. Dilbit is priced higher than WCS because it requires less diluent for pipeline transport. b. Dilbit and WCS are priced similarly as they both represent heavy oil blends. c. Dilbit typically trades at a discount to WCS due to its higher bitumen content, making it heavier. d. Dilbit price is determined independently of WCS, based on global bitumen demand.

A

c. Dilbit typically trades at a discount to WCS due to its higher bitumen content, making it heavier.

81
Q

What is the “bitumen netback” price, and what does it signify for Alberta’s producers? a. It is the price of raw bitumen at the point of extraction, before any processing. b. It reflects the global market price of bitumen, benchmarked against Brent or WTI. c. It represents the price of bitumen after adding transportation and diluent costs. d. It is the theoretical value of bitumen after subtracting transportation and diluent costs, representing the net revenue for producers.

A

d. It is the theoretical value of bitumen after subtracting transportation and diluent costs, representing the net revenue for producers.

82
Q

According to the source, how does Alberta’s access to markets influence the price discounts on its oil? a. Limited access to global markets reduces transportation costs, resulting in smaller price discounts. b. Increased access to refineries worldwide can help minimize price discounts, as transportation costs become less of a factor. c. Market access has no significant impact on price discounts, as oil quality remains the primary determinant. d. Restricted access to certain markets allows Alberta to charge premium prices for its oil due to scarcity.

A

b. Increased access to refineries worldwide can help minimize price discounts, as transportation costs become less of a factor.

83
Q

Before the refining process that produced kerosene was introduced, what was oil primarily used for?2.
a. Fuel for engines. b. Lubrication. c. Lighting. d. Asphalt production.

A

b. Lubrication

84
Q

Why was gasoline initially considered a byproduct of oil refining?4.
a. It was unstable and difficult to control. b. It was too expensive to produce. c. There was no demand for it. d. It was highly polluting.

A

a. It was unstable and difficult to control

85
Q

What innovation led to the significant increase in the demand for gasoline?6.
a. The invention of the steam engine. b. The development of kerosene lamps. c. The invention of the internal combustion engine. d. The discovery of new oil fields.

A

c. The invention of the internal combustion engine.

86
Q

What challenge did Karl Benz face in popularising his internal combustion engine vehicle?8.
a. The lack of skilled craftsmen to build the vehicles. b. The lack of infrastructure to supply gasoline. c. The high cost of producing gasoline. d. Public resistance to new technology.

A

b. The lack of infrastructure to supply gasoline.

87
Q

.
How did William Knox Darcy gain control over the extraction and sale of oil in Persia?10.
a. Through negotiations with local rulers. b. By investing heavily in oil exploration. c. By securing a monopoly from the British government. d. By discovering the largest oil field in the region.

A

c. By securing a monopoly from the British government.

88
Q

What was John D. Rockefeller’s vision for Standard Oil?12.
a. To provide affordable oil to the masses. b. To become a global leader in renewable energy. c. To control the entire oil production process from extraction to sale. d. To break up the oil industry’s monopoly.

A

c. To control the entire oil production process from extraction to sale.

89
Q

Why was Standard Oil eventually broken up into smaller companies?14.
a. Due to John D. Rockefeller’s philanthropic efforts. b. Because of declining demand for oil in the early 20th century. c. As a result of international pressure to reduce American dominance. d. Due to concerns about its excessive control over the American oil industry.

A

d. Due to concerns about its excessive control over the American oil industry.

90
Q

What innovation in automobile production did Henry Ford introduce?16.
a. The use of skilled craftsmen to hand-build cars. b. The implementation of the assembly line. c. The development of the first electric car. d. The introduction of mass advertising campaigns.

A

b. The implementation of the assembly line

91
Q

How did the mass production of automobiles affect the development of infrastructure?18.
a. It led to a decrease in the need for roads and highways. b. It slowed down the expansion of suburban areas. c. It spurred the construction of more roads and highways and the creation of suburbs. d. It had no significant impact on infrastructure.

A

c. It spurred the construction of more roads and highways and the creation of suburbs.

92
Q

.
Why did gasoline become a strategic resource during times of war?
a. It was used to manufacture weapons. b. It was essential for powering military vehicles and equipment. c. It was a valuable commodity that could be traded for other resources. d. It was used to produce synthetic rubber.

A

b. It was essential for powering military vehicles and equipment

93
Q

What was the primary reason behind the CIA and MI6’s involvement in the overthrow of Iranian Premier Mohammad Mossadeq?12.
a. His support for nationalising the Iranian oil industry. b. Concerns about his perceived sympathy towards the Soviet Union. c. His refusal to grant Western oil companies access to Iranian oil fields. d. His human rights abuses and authoritarian rule.

A

b. Concerns about his perceived sympathy towards the Soviet Union.

94
Q

What was the main goal of OPEC, the Organization of Petroleum Exporting Countries?14.
a. To promote the development of renewable energy sources. b. To ensure a stable supply of oil to Western nations. c. To control the world price and access to oil. d. To resolve conflicts between oil-producing countries.

A

c. To control the world price and access to oil.

95
Q

What event led to OPEC imposing an oil embargo and significantly raising oil prices in 1973?16.
a. The Iranian Revolution. b. The First Gulf War. c. The discovery of new oil fields in the North Sea. d. The Yom Kippur War in the Middle East.

A

d. The Yom Kippur War in the Middle East.

96
Q

What challenge did OPEC face in maintaining its control over oil prices?18.
a. Declining global demand for oil. b. The discovery of vast new oil reserves. c. The lack of discipline among its member countries. d. The development of alternative energy sources.

A

c. The lack of discipline among its member countries.

97
Q

.
What environmental problems are associated with the oil and gas industry?20.
a. Air and water pollution from refineries and transportation. b. Land degradation due to oil spills and pipeline construction. c. Risks associated with transporting oil by tankers and pipelines. d. All of the above.

A

d. All of the above.

98
Q

What was the original purpose of Petro-Canada, a Canadian crown corporation established in the 1970s?22.
a. To compete with American oil companies and lower gas prices. b. To nationalise the Canadian oil industry. c. To provide Canada with greater control and insight into the oil industry. d. To promote environmental sustainability in oil production.

A

c. To provide Canada with greater control and insight into the oil industry.

99
Q

What was the eventual fate of Petro-Canada?24.
a. It was merged with another Canadian oil company. b. It was privatized by the Canadian government. c. It was declared bankrupt due to mismanagement. d. It continues to operate as a crown corporation.

A

b. It was privatized by the Canadian government.

100
Q

What is petroleum?2.
a. A synthetic liquid created in a lab. b. A solid fossil fuel found deep underground. c. A naturally occurring liquid found beneath the earth’s surface that can be refined into fuel. d. A renewable energy source.

A

c. A naturally occurring liquid found beneath the earth’s surface that can be refined into fuel.

101
Q

3.
Which of the following is NOT a use of petroleum?4.
a. Fuel for vehicles. b. Heating units. c. Construction materials like bricks and concrete. d. Plastics.

A

c. Construction materials like bricks and concrete

102
Q

What makes petroleum significant in global politics and economics?6.
a. Its limited availability in only a few countries. b. Its use in creating weapons of mass destruction. c. The dependence of most of the world on it for goods and services. d. Its ability to cure various diseases.

A

c. The dependence of most of the world on it for goods and services.

103
Q

How does the density of petroleum affect its processing and value?8.
a. Denser petroleum is easier to process and therefore more valuable. b. The density of petroleum has no impact on its processing or value. c. Denser petroleum is more difficult to process and less valuable. d. Denser petroleum is primarily used for lubrication and has a niche market.

A

c. Denser petroleum is more difficult to process and less valuable

104
Q

What is the role of upstream oil and gas companies in the petroleum industry?10.
a. They refine and separate crude oil into different types of fuels. b. They transport and store oil and other refined products. c. They identify, extract, or produce raw materials. d. They market and sell petroleum products to consumers.

A

c. They identify, extract, or produce raw materials.

105
Q

What environmental concern is associated with the transportation of petroleum?12.
a. Noise pollution from tankers and pipelines. b. Light pollution from flares at drilling sites. c. The potential for leaks and spills that can damage ecosystems. d. The depletion of ozone layer due to emissions from tankers.

A

c. The potential for leaks and spills that can damage ecosystems.

106
Q

According to the source, which of the following countries has the largest oil reserves?14.
a. Saudi Arabia. b. Canada. c. United States. d. Venezuela.

A

d. Venezuela.

107
Q

.
What is “directional drilling” in the context of oil extraction?16.
a. Drilling horizontally to access multiple oil pockets. b. Drilling vertically to a known source of oil. c. Drilling in a random direction to explore for new reserves. d. Drilling using environmentally friendly techniques.

A

b. Drilling vertically to a known source of oil.

108
Q

Which of the following is NOT mentioned as a potential alternative to petroleum?18.
a. Wind power. b. Solar power. c. Nuclear power. d. Biofuels.

A

c. Nuclear power

109
Q

What is the primary reason petroleum is considered a non-renewable energy source?20.
a. It takes millions of years to form. b. There is a finite amount of petroleum available. c. The extraction process is too complex and expensive. d. It releases harmful pollutants when burned.

A

b. There is a finite amount of petroleum available

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