International Energy Agency cited in Puzzanghera ( 2014) affirms that the demand of oil will raised slightly with the number of 1.9million barrels per day due to the growing economy and the economic recovery in developed countries. This evidence shows the development of economy are connected with the oil demand. The oil is widely used in the manufactories, chemical industry and weapon industry. With the development of economy and technology, the oil is available for many fields for keeping the manufacture and daily use. The demand of oil has been significantly increased in both developed countries and developing countries because the productivity has been improved rapidly by using the advanced technology which requires the consumption of oil. There are many factors impact the demand for oil as the following: firstly is the industrialization, such as trade and factories need to manufacture the production to satisfy the consumers’ requirement that in particular need large amounts of petroleum fuels contribute to the operating which lead to the energy demand increase. Secondly is in the developing countries, the quality of life has been improved with the Gross Domestic Product growth. Therefore, the first vehicle and the airplane had been invented followed by the consumption increased dramatically which leads to the large amounts of oil demand to satisfy daily use. The thirdly is the in the field of transportation, petroleum-based fuels as a basic dependency on essential part of life. Not only for the long distance travel by plane but also the business via shipping, the want of large amount are required and increased the demand of oil. The improvement of economy do not without the energy. Due to the boost of demand for oil worldwide many countries benefit from export oil to gain the large amount profits. While the demand for oil lead to a serious problem such as the waste of resource environmental pollution and conflict between countries.
Changing in demands is influenced by many factors particularly in the number of buyers and prices of related goods. According to Sheppard (2013) oil consumption in developing countries exceed the wealth countries in 2013 that dramatically increased in Asia, such as China and Indonesia. Energy Information Administration cited in Sheppard (2013) affirms that developing countries become the major consumers in demand of oil rather than wealth countries. The next two years the amount of oil will increase to between 420,000 and 430,000. As mentioned in this article because those manufactories in countries Middle East and India have strong growth in economy which lead to the higher demand for oil. This evidence indicates that growing amount of buyers contribute to the rising in demand for the oil influenced the international oil price.
2. From the information in the article, what are the demand factors that are influencing international oil prices? What are the supply factors that are influencing international oil prices?
In addition, there is reflected from this article that the price of related goods will impact the demand for the oil. IEA (cited in Jayanthakumaran p.105 )claims that wish the non-conventional oil production such as corn ethanol, oil sands and extra heavy crude oil will satisfy the requirement of demand for oil, however it added extra cost of government which leads to the increased in demand for oil that contribute to the growing in international oil prices. The non-conventional oil production as the alternative energy may replace the oil in the future, if the price for substitute’s goods raised the demand for oil will dropped and vice versa.
In the other hand, there are several supply factors affect the international oil prices. Firstly, it is necessary to explore the oil worldwide with the advanced technology because as mentioned in this article the shortage of oil leads to adventures exploring the deepwater drilling