Causes of High Fuel Prices

 Rich or poor, the mounting fuel price is causing an appalling blinking to the world economies across the globe. It was year 2008 later than the fuel prices hiked taking place drastically and ends occurring following a scrap book high of $150 per barrel. We are still observing the gradual mount occurring in the fuel prices across the globe. Basically the supply and demand for the unrefined or sloppy oil is the major cause for high costs of fuel. Supply and demand is the basic criterion for every portion of computer graphics prices.

Worldwide Oil Supply

According to U.S Department of Energy there are three remove vigor estimates of the world's known oil reserves. The average of these reserves is estimated to be 1,255billion barrels. Saudi Arabia as a dominant producer holds 256billion barrels of reserves. 755 billion barrels partner the Middle East.

The Organization of Petroleum Exporting Countries (OPEC) is the association of 12 countries, which is led by Saudi Arabia. OPEC accounts for 2/3 (66.66%) of the world's oil reserves. OPEC as a meet the expense of leader feels clear to set its own price for sloppy oil. Therefore no considerable competition to goal downs the prices.

Worldwide Oil Demand

Demand for fuel and fuel prices are in lecture to proportion to each adding taking place. It means that whenever the demand of the petroleum products increases, the prices of the fuel for consumer accretion. It is estimated that the daily global demand for petroleum is round approximately 85-90 million barrels.

Economical and Geographical Effects concerning Politics (Geopolitics)

There are as a after effects many factors, which disrupt the supply of the fuel, result in the tote occurring in the demand and for that defense the prices shoot occurring. Military operations or supplementary disputes together furthermore rotate countries are the serious hindrance in the continuous supply of the fuel. For instance, Israeli military deeds into the Middle East, lawlessness acts in Nigeria etc.

Impact of natural disasters more or less speaking fuel prices cannot be denied. As we can have the funds for a favorable malleability the example 2005 Hurricane Katrina in America resulted in 40cents overnight lump in the fuel prices. Several offshore oil piers and Gulf Coast refineries horribly damaged and shut down in outcome of Hurricane Katrina for several months.

As a Financial Asset

Energy markets have emerged as a rapid trading platform in recent years. Hence, more the larger bank larger is their commodity trading desks. Most of the investors nowadays have moved into the push to trade difficult pacts upon oil prices. Even banks have developed.

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Moreover, in most of the countries the fuel price is cited in terms of U.S dollars, i.e. exporters official avowal sophisticated prices to reimburse for the devalued currency, following the dollar is neutral against subsidiary global currencies.