Crude Oil Prices: Factors Affecting Fluctuations and Welfare Implications

RUNNING HEAD: CRUDE OIL PRICES 3
Microeconomic Analysis
Students Name
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RUNNING HEAD: CRUDE OIL PRICES 1
Executive Summary
The report focuses on the United Kingdom after the Brexit Vote. Primarily the report
explore the benefits and limitations international firms in the United Kingdom had to encounter
whilst in the European Union. In addition, an analysis of whether the Brexit vote was good or
bad to the United Kingdom international firm performance and the economic impacts on the
economy as a whole. Overall, the Brexit vote has made both positive and negative impacts on the
United Kingdom economy.

RUNNING HEAD: CRUDE OIL PRICES 2
TABLE OF CONTENTS
001: Executive summary..........................................................1
002: Table of contents............................................................ 2
003: Introduction.................................................................. 3
004: Exchange outcome......................................................... 3
005: Factors that affect market outcome over time...........................5
0006: Reasons why oil prices fluctuate....................................... 6
007: Welfare implications of exchange outcomes.......................... .7
008: Government intervention................................................... 8
009: Conclusion.................................................................. 8
010: References...................................................................9

RUNNING HEAD: CRUDE OIL PRICES 3
INTRODUCTION
Primarily, oil is considered among the top energy consumption source in the global
economy alongside gas. The expansion of the global economy dwells on crude oil consumption
(Kar & Pathak, 2017).The global economy thrives on energy consumption, mainly oil and gas.
There is a direct impact of global oil prices on the welfare of economies and consumers. There
are various reasons for the fluctuation of oil prices such ad demand and supply of crude oil
factors, exchange rate outcomes, market forces such as cartel behavior among others. Owing to
the growing crude oil prices in the world this has created the need for governments to intervene
in order to protect consumers. The need for government regulations has arisen from the need to
control the crude oil fluctuations.
EXCHANGE PROCESS, MARKET, AGENTS, AND EQUILIBRIUM OUTCOMES
The exchange process in the global crude oil economy has made various industry changes.
The global crude economy changes based on the exchange outcomes. Specifically, the dollar
appreciation and depreciation, negatively and positively impacts on the global oil economy
(Obstefeld, Milesi –Ferretti & Arezki, 2017).Primarily, the dollar is the major exchange mode of
exchange for the global market economy. For oil producers oil revenue is exchange in dollars
thus making the oil prices to be affected by its appreciation and depreciation. Particularly, market
forces such as cartels directly impact the prices of oil prices .Noteworthy, the OPEC group plays
an important role in determination of global crude oil prices (Trefis Team, 2017).The
implementation of a reduced production by the OPEC countries greatly impacted the crude oil
prices in Nov 2016.