Can Petroleum Producers and Suppliers Have A Detrimental Affect on Economies Around the World and on the Production and Manufacturing Industry through the Setting of Unanticipated High Prices?

Matharu, Pavanjeet Singh (2010) Can Petroleum Producers and Suppliers Have A Detrimental Affect on Economies Around the World and on the Production and Manufacturing Industry through the Setting of Unanticipated High Prices? [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

ABSTRACT

The dissertation question that I have set out to investigate is, “Can petroleum producers and suppliers have a detrimental affect on economies around the world and on the production and manufacturing industry through the setting of unanticipated high prices?”

The objectives of this study include:

 Do the sharp increases in oil prices have an adverse affect on developed economies? (Analysis of the USA)

 Do the sharp increases in oil prices have an adverse affect on developing economies? (Analysis of China and Brazil)

 Is the Production and Manufacturing Industry affected by high oil prices and to what extent?

Methodology

There will be the use of a number of key economic indicators and industrial data for each country and the oil prices set by one of the biggest oil exporters in the world, OPEC. Such data will be in the form of time series data which will allow for the comparison of the impact of oil prices between 1970-1980 and 1999-2009 where the data is available. Each of the economies will be analysed for the impact that oil prices may have on them and on the production and manufacturing industry within them, looking at the level of significance between the variables and the level of explanation that oil prices may be able to give when assessing the impact of oil prices on another variable. The analysis of the production and manufacturing industry will enable one to see a more direct affect on the economies as industries can be highly oil intensive. Oil prices may have an indirect knock on effect on the key economic indicators, but may have a direct impact on the industry, so uncovering a causal affect may be easier and more relevant when using such a variable. This will be done through the use of Simple Regressions and Multiple Regressions.

Conclusion

When answering the dissertation question the results and findings are inconclusive.

My findings show that overall for the U.S.A. there has been a fall in the level that the economy may be affected by oil prices when comparing the two periods. Results show that China is impacted to a lower extent in comparison to the U.S.A., and Brazil can be impacted by high oil prices, especially when looking at the industrial sector. A full and just judgement cannot be made however as the data available for China and Brazil does not span far back enough to compare the chosen periods and also because the question set to investigate is a very difficult one to prove right or wrong with the particular method that is used.

Overall the results do not show clear cut evidence that suggests that petroleum producers and suppliers can still have a detrimental impact on economies around the world and on the production and manufacturing industry. Although there is an impact, the ferocity of such an impact may not be known as some economies may have adapted and prepared themselves for circumstances such as the increase of oil prices.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 21 Jan 2011 08:52
Last Modified: 23 Oct 2016 05:27
URI: http://eprints.nottingham.ac.uk/id/eprint/24134

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