Trends in Crude Oil Demand in United States over Time Assignment

Trends in Crude Oil Demand in United States over Time - Assignment Example In the throes of elevated oil prices, people, as well as industries, focused on reducing reliance on oil and oil products by investing in alternative energy and manufacturing more fuel-efficient products especially automobiles respectively. As a result, towards the close of the economic recession, the demand for crude had experienced a visible dent. Demand for crude, however, remained largely unaffected considering that alternative energy is yet to become a close and easily realizable alternative to crude. Crude oil pricing is highly prone to non-price factors that upset demand. Oil prices change wildly due to the geopolitical events afflicting the highly capricious Middle East, where most of the world’s crude production happens. The recent political mayhem in the Arab world resulted in an unmatched upsurge in prices of crude on the global scene, mainly due to a dip in supply. Throughout history, brief upsets in the price of oil are unmistakable in the event of unanticipated oversupply or unexpected shortages. Another key factor affecting the price of oil in the United States is the policy regulations imposed by the government, especially after the close of Second World War. Subsequently, in the post-war era, government regulations on the industry have commendably kept the prices of crude in the US well below the global average. Changes in global trading have significantly lessened control of conventional regulatory mechanisms in curtailing the prices of crude oil. Investors’ speculation in oil futures in the recent past has resulted in a distinguishable upsurge in the prices of crude. Global economic crises seem to have a strong correlation with rising in crude oil prices in the world. According to analysts’ figures, unprecedented high prices of oil herald economic downturns. What is more fascinating is that the economic recessions result in lower oil prices. For instance, in the 2008 economic meltdown, the price fell from over $120 per barrel as the crisis began to less than $40 (Chevron, 1) at the peak of the crisis.