Oil Industry
Group 16:
Econ Project #1
Due: 16 October 2003
Introduction by Jamie Ifkovits: Oil is certainly the world 's largest cash commodity. One of the main products produced from crude oil is gasoline. Gas plays a significant role in the life of people in countries throughout the world. Gas accounts for approximately 17% of the energy consumed in the United States and is primarily used for powering automobiles ("A Primer on Gasolne Prices" 5 Oct 2003). The prices paid by customers at the pumps reflects the price of production and delivery, the retail costs, and taxes ("A Primer on Gasoline Prices" 5 Oct 2003). By 1932 all of the states had excised taxes on gasoline and the federal government introduced its first tax on gasoline. As can be seen by Figure 1 in the Appendix, other countries experience more taxes per gallon of gas. England taxes almost five times as much per gallon of gas than the United States. This may be due to the fact that the US is third in producing the most barrels of oil per day (5.801) whereas England is not. This is evident on Figure 2 which can be found in the Appendix ("OPEC: Frequently Asked Questions" 5 Oct 2003). OPEC reported in 2001 crude oil reserves stood at 1,074,850 million barrels of which 79% were in OPEC countries. They also reported that the world oil demand in 2000 was at about 76 million barrels per day. Oil is a limited resource and may one day run out. According to OPEC, there is enough oil in the member country 's reserves to last another 80 years, while non-OPEC country 's reserves might last only 20 years. This paper will attempt to look supply and demand by analyzing gasoline markets on many different levels ranging from the local market to the international market ("OPEC: Frequently Asked Questions" 5 Oct 2003). Analysis of Supply and Demand by Nathan Decker
The law of supply states that " the higher the price of a good, the more of that good sellers will make available over a
Econ Project #1
Due: 16 October 2003
Introduction by Jamie Ifkovits: Oil is certainly the world 's largest cash commodity. One of the main products produced from crude oil is gasoline. Gas plays a significant role in the life of people in countries throughout the world. Gas accounts for approximately 17% of the energy consumed in the United States and is primarily used for powering automobiles ("A Primer on Gasolne Prices" 5 Oct 2003). The prices paid by customers at the pumps reflects the price of production and delivery, the retail costs, and taxes ("A Primer on Gasoline Prices" 5 Oct 2003). By 1932 all of the states had excised taxes on gasoline and the federal government introduced its first tax on gasoline. As can be seen by Figure 1 in the Appendix, other countries experience more taxes per gallon of gas. England taxes almost five times as much per gallon of gas than the United States. This may be due to the fact that the US is third in producing the most barrels of oil per day (5.801) whereas England is not. This is evident on Figure 2 which can be found in the Appendix ("OPEC: Frequently Asked Questions" 5 Oct 2003). OPEC reported in 2001 crude oil reserves stood at 1,074,850 million barrels of which 79% were in OPEC countries. They also reported that the world oil demand in 2000 was at about 76 million barrels per day. Oil is a limited resource and may one day run out. According to OPEC, there is enough oil in the member country 's reserves to last another 80 years, while non-OPEC country 's reserves might last only 20 years. This paper will attempt to look supply and demand by analyzing gasoline markets on many different levels ranging from the local market to the international market ("OPEC: Frequently Asked Questions" 5 Oct 2003). Analysis of Supply and Demand by Nathan Decker
The law of supply states that " the higher the price of a good, the more of that good sellers will make available over a