Average Crude Oil Prices in UK from 2010-2020

This document discusses the changes in average crude oil prices in the UK from 2010-2020 and the economic determinants of these changes. It also explores the effects of government actions during this period and predicts the immediate and future effects of COVID-19 on the price of crude oil. The document provides insights into the economic condition and situation of the UK due to changes in crude oil prices.

Report
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Discuss about that average crude oil prices in UK changed over period from 2010-2020.........3
Describe the economic determinants of changes in the crude oil prices in UK..........................4
Government take an action over period of 2010-2020 affected the UK market.........................7
Analyse and predict the immediate, future effects of COVID-19 on the price of crude oil........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
The documentation will discuss about the average crude oil price in United Kingdom and
also identifying changes over period from 2012 to 2020. The report is mainly focused on the
economic condition and situation of nation due to change of crude oil prices. Furthermore, it will
describe that how government will take action towards the period of 2010 to 2020, which
directly affected the marketplace. However, it will be analyse and predict during COVID-19 that
directly effects on the price of crude oil in marketplace.
MAIN BODY
Discuss about that average crude oil prices in UK changed over period from 2010-2020.
The significant fall in the crude oil prices since Mid-2014, should be increased overall the
UK economic activity as decrease the production price for enterprises, especially when
organizations are totally dependent on the various oil inputs. Therefore, it will boost the
employment as well as investment.
Although the gas and oil extraction industry that has negatively affected by the price of
crude oil in UK. As per evidence, it has found that price of crude oil drastically changed and also
effects on the economic condition in different gas and oil industry. In some case, the reduction in
oil price is permanent with settling at $50 per barrel (Asl, Canarella and Miller, 2020). The
current size of UK economic GDP will be increasing approximately 1% on average relative base
line between 2010 to 2020. Furthermore, it also increased the employment rate around 90,000 by
2020. Especially, with a peak boot to the employment around 12, 0000 in 2016 (Wei, Liu and
Hu, 2017).
On the other hand, the significant impacts that are smaller where fall in the price of crude
oil which is temporary. Sometimes, it is depending on how oil price/cost rebound and also boost
the GDP approximately 0.2% to 0.5% (Hayat and et.al., 2020). In order to increase the
employment rate in UK (LE, CHANG and PARK, 2020). In 2014, it has been drastically decline
the oil price/cost and also impacts on the economic condition of UK. At that time, it has been
identified the price of crude oil US$100/barrel market over 2-4 years to mid-2014 (Wei, Liu and
Hu, 2017). Afterwards, it also increased mid-January 2015, oil price has fallen in 2014 June. The
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recent fall in the prices of oil was considered as one of the biggest with completely decline in
recent decade, which being collapse in 2020.
Figure 1
According to survey, it has identified that price of crude oil shocks on the current UK economy
condition. It can be used the computable general equilibrium model that help for impacts on the
future changes in oil price. Through this model, it can be identified the comparison between oil
price/cost 2010 to 2020 (Bateman and Kling, 2020). It is based on the standard tool in term of
economic analysis, which become useful for recognised by multiple large corporation. Moreover,
oil price/cost can be defined into different scenario for 2010 to 2020.
Initially, oil price remain at low level approximately US$50/barrel and gradually
increases to US$75/barrel in 2020 (Hayat and et.al., 2020). Afterwards, it remain constant $108
per barrel mid-2014 (Hayat and et.al., 2020). Moreover, it also representing the significant
impact of changes in oil cost/price on the level of UK. Therefore, it has remain persistently low
at $50 barrel between 2015 to 2020. Thus, it directly impact on the GDP by 1.2% at initial years
(Wei, Liu and Hu, 2017).
Describe the economic determinants of changes in the crude oil prices in UK.
It is likely that both increases the demand and supply chain disruption, which have exerted
upwards pressure on the crude oil prices/cost. Nowadays, it has been rapidly increasing the crude
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oil and also gain more production in marketplace (Salisu, Ebuh and Usman, 2020). In United
Kingdom, Large Corporation have improved the economic condition of nations through
production and sales. The crude oil production have been increasingly in both urbanised as well
as industrialised perspective. In this way, it contribute to increase the demand of oil in
marketplace. In recently, oil and gas industry have a fear of supply disruption in United
Kingdom.
Furthermore, it also identified that how price effects on the household and enterprise. It is
not leap to understand that how it directly affecting on the macro-economy. Generally, the price
of crude oil has been increasingly inflation and also reduce economic growth. In recent, oil
prices are directly affecting on the good which has made with petroleum items (Baldwin and
Mauro, 2020). On the other hand, oil price/cost are indirectly affect the price of manufacturing,
heating and transportation. When increase the price that can turn affect the price of different
good as well as service. Nowadays, it has been increased the crude oil price which lead to
consumption cost depending on how oil useful for purpose of production within transportation
services.
Crude oil prices change with quickly in response of policy, cycles and fluctuation in the
UK market. Since 2014, it has been experienced the crude oil prices with starts downward
journey. It may fall from $105/ barrel (Gillingham, Knittel and Reguant, 2020). But recent 2020,
it also accelerated to decline in reaction to the COVID-9. In additional, major oil producers are
failed to come under agreement on cutting the production. By mid-2020, it was fluctuating the
price of crude oil and just around $30/barrel. In order to collapse the price of crude oil during
COVID-19 and also slow down economic condition.
In past decade, it has been triggered by multiple political event or program that have
caused oil prices drastically manner. Thus, financial crisis and other global economic crisis are
being fluctuated.
Economic Factor:
There are many other communities, oil prices/costs are directly linked with economic
activities across different countries. In order to increase demand and consumption of crude oil by
gas and oil industry. Afterwards, it will be increases with economic, population growth and also
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reduce when it has been established the situation regarding economic recession. In UK, it has
already increased demand of crude oil so that eventually leading the price/cost of oil (Gurav and
Kotrappa, 2020). In order to gain the maximum profit and economic wealth, who will supply the
crude oil in UK. The oil prices remain at high level where economic growth is also importing
nations, which may have a decline and causes in demand as well as price. Generally, high prices
will be increasing the demand in term of petroleum investment, budget development and
exploration. According to world business cycle, the prices of crude oil fluctuations that are
mainly driven by demand of economic factors. In UK, the strong trends to gain more output,
especially when emerging the markets, it could be increasing the trend or demand upwards. As
per estimation, it has identified that crude oil prices that always support for increasing growth of
GDP approximately 3.5% per annum (Hayat, Daud and Zhang, 2020). The reason behind to
estimate the assumptions towards crude oil supply chain, improvement in oil use effectively.
Nowadays, oil conservations efforts that can increase reduction of oil demand and also
going forward. In case, it has increased the crude oil price that require to develop or implement
efficient technologies. In order to improve the standards of fuel efficiency. As a result, it has
continuously downwards trend of crude oil for perspective of advanced economies. In past
decade, it has found that historical trend completely decline in term of crude oil consumption.
Therefore, it is also projected the current GDP ratio on the basis of assumptions about future
improvement.
In UK, it has already increased the demand of automobile industry so that many people can
purchase vehicle. In this way, it has examined that automobile sector which have a significant
contributors to downward trends. Within emerging market, it has been rapidly growing middle
class but it has unclear whether improvement in fuel efficiency.
Furthermore, it has summarised that fall in oil prices since 2014. It should be increased
the entire economic activities and also decrease the price of production for enterprises. During
COVID-19, it has developed the situation of economic recession that will be affecting the
economic condition of nation (Aydın and Ari, 2020). As a result, it has growing the economic
activities, tax revenue which will increase as tax take from other individual person income and
corporation. Moreover, it has declined the revenue from oil and gas sector, due to fallen oil
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prices, which directly impact on the UK trade. The economic factor that are combined with
downward pressure on the crude oil prices. Apart from that other oil consumers are taking
benefit, advantage to gain more opportunity (Lei, Shang and Wei, 2019). The combination of
demand of economic factors which lead to decline, contribution to increase the output. For long
term, advancement of modern technology will continue to drive down the price or cost of
extracting oil reserves. Thus, it will unbalance the UK economy in term of manufacturing to
service. In order to negative impact on crude oil consumption. Due to COVID-19 pandemic, it
has been reduced the demand crude oil in UK because it has stopped the use of transportation
services. Moreover, it has a lower the oil production to increase high prices. Afterwards, it is
directly affecting on the economic condition or situation in marketplace.
Government take an action over period of 2010-2020 affected the UK market.
In recently, it has experienced as significant shock since start of COVID-19 pandemic.
GDP has fallen rapidly and also record broad based falls in the production of crude oil in
marketplace. As per evidence, it has examined the overall business returns and external data,
which mainly include from over 15,000 businesses has fallen. Thus, negative impact on the
current output during 2020. In UK, GDP fell by 20.5% in month and record similar situation
since 1997 (del Rio-Chanona and et.al., 2020). These are reflecting widespread falls in services,
construction and production output.
Monthly basis, it has declined GDP in April 2020 is three time greater than fall
experienced during 2008 to 2009 economic downturn. In order to develop the global financial
crisis from peak in 2008 to lowest of March 2009 (Aladejare, 2020).
The global financial crisis that hit in 2020, most serious economic shock since 2010. It
has developed the condition of recession in UK. Afterwards, government had taken important
steps that are much closely connected to each other. UK government is mainly focused on the
removing barriers around the global world. In order to establish the coordination with banks,
identifying the money to meet the need or requirement of losses. COVID-19 pandemic in 2020,
that was one of big problem because crude oil sector faced financial problem. In this way,
Government initiative to pull down the rest of UK economy (Kuzemko and et.al., 2020). The
strongest presence of different financial institution in London where a city perform significant
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role as financial centre. Thus, it also increased the risk in the investments. Especially when risk
or threat failed and governments had to intervene.
For purpose security, it has been estimated that 40% of federal tax and defense is 26%.
When economy has falters so that government income from taxes, also collecting from
individuals as well as corporations. In this way, it will be collecting large amount money for
providing the better facilities and services to individuals. Afterwards, government can take action
to setup the specific rules and regulations. Hence, it help for improving the current economic
condition in UK.
On the other hand, Governance of international oil and gas in recent scenario. in order to
increase the price/cost of crude oil in marketplace. It is the best way to represent the current
economic condition due to COVID-19 (Kang, Nikitopoulos and Prokopczuk, 2020). Moreover, it
assessing the effects of government policies and procedures that helpful to keep improve the
economic situation. In perspective concerning about the relative crude oil prices that will be
increasing and also shifting towards comparative advantage.
Analyse and predict the immediate, future effects of COVID-19 on the price of crude oil.
The economic situation cannot predict the future but it also help for improving the policy as
well as procedure. In context of oil markets, it is very hardly thinks about when reading more
updates on COVID-19. It is becoming consider as global threat that directly impact on the
service workers and devastating low wage.
Nowadays, COVID-19 pandemic is continuously rolling the crude oil and related the
markets in way that will have several effects on the economic activities. In last month, it has
fallen the price of crude oil approximately 40%. In order to quite response for projecting the
specific demand and supply chain increases (YUKSEL, UBAY and SEZER, 2020). In global
markets, it has combined with different supply chain for increasing the demand but
unfortunately, it drive a huge price drop. It is not just for 2020 but also predict into future.
On the other hand, even small demand or supply that would be mismatches, which can
trigger big price effects, not only for analysing the unexpected market disruption. During
COVID-19, it has increased the conflict between Saudi Arabia and UK regarding the oil
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price/cost. It have exhibited the sudden changes and unusual condition because of COVID-19
Pandemic.
In recently, the petroleum market has been faced the challenges and negative way to
effects on the demand or supply chain. It has continuously arise from drop in the workforce, In
case of COVID which may directly affecting the employees acquiring diseases. That’s why, it
has slow down the supply of different materials (Feng, Xu and Li, 2020). Intermediate inputs and
other capital because of disturbances in the transportation services. Moreover, there are various
crude oil factories stopped the employees from travelling. It also increased the large number of
people staying at home. Thus, it may increase loss when dropping the raw materials and other
essential inputs.
In current scenario, it is very tough for handling the situation because it has dramatically
effects on the UK and crude oil industries. The significant impact of COVID-19 on the economy.
Sometimes, it has been explored the connection between health as well as wealth during
pandemic, also increasing the mortality rate.
Other hand, it has analysed to predict the impact of COVID-19, which continuously
decline the crude oil prices. Therefore, it will impact on the headline inflation and also occurred
in the future (Yakubu and et.al., 2020). Sometimes, it could impact on the business inflation and
other household expectations. During COVID-19, it has volatilities of crude oil prices, which has
caused different issues or problems.
In future, it also predicting the significant affects on the Crude oil prices due to COVID-
19 Pandemic. It has emphasised with the presence of other outliers in oil price and impact on the
identification, estimation power (Agbanike and et.al., 2019). Another way, it also very difficult
for government to predict the future condition. in current situation, it effect on the overall
revenue, production and sales but afterwards, it will be chances to improve the financial
recession and increase revenue of crude oil sectors.
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CONCLUSION
From above discussion, it has summarised about the average crude oil price in UK, Also
identifying that increases crude oil prices over period from 2010 to 2020. It examine the global
financial recession due to COVID-19 pandemic. Therefore, Gas and oil sectors are suffering
problem, losses which directly affecting on the economic condition. Furthermore, the
documentation has discussed about the effective action that mainly performed by UK
government against financial recession in 2020. However, it can be analysed and predict during
COVID-19 that directly effects on the price of crude oil.
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