How does oil and gas market effect on world economic

There is no contention or doubt that oil and gas are the major sources of energy in the world, despite the invention of other sources of energy like Nuclear and geothermal energy, oil and gas remain the most crucial and fundamental source of energy. The economy of most countries in the world is dependent upon oil and natural gas. this has been greatly evidenced by the effect of global oil and gas prices on the prices of other basic commodities and the cost of living. This vehemently indicates that the global economy is inextricably bound with the global oil and gas market. Political crisis and interrupting in major petroleum producing countries has often had tremendous effect on global prices of all other industrial commodities. This is because oil and gas energy is the backbone of industrial activities and development. . Other factors affecting the global oil market include technical factors, pricing and marketing, Environmental issues, national security, and public policy choices and debates in global oil markets. According to a report released by the International Energy Agency in the year 2011, the top ten oil producers accounted for 63% of the oil produced worldwide. These giant oil producers who have a large share of the Market greatly influence the international oil market. It is also projected that USA is going to overtake Russia as the largest oil producer by 2017. The greatest share of oil production is in the Middle East and political crisis in the last few years has seen a significant increase in global oil and gas prices. … Market regionalisation would see very great oil price disparities which is mitigated by the oil controlling cartels like OPEC (Organisation for Petroleum Exporting Countries) OPEC has dominated the global oil market for a very long time and has somehow been effective in pushing the price of oil upwards in favour of oil producers. Due to the impact that the cartel has on the prices of oil and the market in general, there have been claims that the global oil market is not a fair market. This has seen petroleum producing countries realise a lot of wealth from the oil importing countries. The cartel has been effective in keeping the prices of oil higher than it would probably be if controlled by competition in a liberal market. However oil prices are at times greatly affected by world crisis or disasters and also speculation by the traders in this multi Trillion industry The petroleum producing countries greatly impact on the global oil prices by regulating production and supply, especially OPEC is very instrumental in regulating production by member states thus affecting supply and demand. The organisation is also involved in marketing of oil of the member states giving them a bigger bargaining power. If traders speculate a reduction in oil, prices they push the prices up, the availability of oil in strategic reserves also affect the global oil market. These include the oil stored in American reserves and refineries and also Saudi Arabia which has a very big reserve. If Saudi Arabia for instance allows release of oil from its strategic reserves, global oil prices tend to go down. Demand of oil and gas also greatly impact on the prevailing prices, this is especially during the