How is rise the price of crude oil and impacts How is rise the price of crude oil and what is the impacts it in the market .
Sep 6, 2018 5:51 PM
Answers · 1
Hi Surendra! You may want change the question slightly to "What is the rising price of crude oil, and what are the impacts it on the market. Though my knowledge about crude oil pricing is not great, I'd say the rising price of crude oil comes from the fact that crude oil is a commodity/scare economic resource. The demand of it (owing to the daily consumption both domestic and commercial), is very high in relation to the amount required to be supplied to meet that demand. As crude oil becomes more scarce it becomes more expensive. A part of the cost for purchasing a barrel of crude oil needs to be made of profit for the oil business, costs involved to extract oil from the Earth's sea beds, dividends for shareholder in the business, employee's wages, insurance costs to protect the business, and a reserve for future investment. Hope this helps.
September 6, 2018
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