Oil
Oil is becoming expensive everyday with its price increasing internationally because of various reasons. It is essential in the society nowadays since most activities cannot be performed without it. For recent years, its demand has increased since its uses have become many. This is why producers are inflating the price. Most of the world’s oil is produced in Saudi Arabia, the United States, and Russia. Other countries like China, Iran, Canada, United Arab Emirates, Mexico, Brazil and Kuwait are among the top ten oil producers in the world. It is not easy to forecast the price of oil internationally because it is highly sensitive to a lot of changes in both global demand and supply. However, it could be said that the cost depends solely on demand and supply. When there is a lot of demand in the market, the price of oil increases. This is because many people want it and they are ready to buy at any price. If one buyer is not interested in buying at a high price, there is another buyer who is willing to buy for any amount so long as he/she gets it. Saudi Arabia is the number one producer of oil, and it has known this. This is why it is hoarding its oil so that it can sell it when there is increased demand. The United States and Russia have started doing the same, and now it has remained that they are only willing to supply it when there is a high demand. This is something that is leading to the scarcity of oil in the market. The leading producers are storing their stock so that they can sell when the prices are high. But, the good news for the producers of oil is that the demand does not seem to reduce. Many countries are importing oil for their domestic and industrial purposes. It is required to run engines so that vehicles can move from one place to another. It is also needed to run machines in industries so that the production process would be effective. Without it many domestic and industrial activities are at still. People from all countries require these activities so that they can satisfy their various needs. This is why nowadays every season is good for oil producers. Recently, the price of oil has increased to $70 a barrel. This is a price that has not been experienced for a long time. In fact, it is the highest price to have been charged for a barrel of oil ever since its importation started. The last time that an amount close to this was charged for a barrel of oil was in 2014 when there was a shortage. $70 is a lot of money that is almost double the price of a barrel two years ago. In 2016, the price of a barrel was approximately $35 but, since the demand kept on increasing, two years later we are now at  $70. Organization of the Petroleum Exporting Countries (OPEC) is one of the forces that have led to the increase in the price of oil. The organization is made up of some countries from the Middle East which includes Saudi Arabia, Iran, Iraq, Kuwait and Venezuela. It is led by Saudi Arabia due to its dominant position in the oil production industry. They set prices that favor them so that they can maximize their profits since their primary aim in this industry is to make profit. This has influenced other countries like the United States and Russia to increase their oil prices so that they can be able to make a lot of money and expand their oil industries. In the near future, the price of oil is expected to rise to even $80 a barrel in the international market. In recent years, the United States has tried to offset the shortages in the supply of oil by increasing its production. This is because the country is characterized by a high-tech economy and a stable investment climate that is suitable for the production of oil. Since the other producers sell their oil at high prices, American producers have been prompted to increase their prices on the global market. This is what has contributed to the increase in oil prices both for domestic and industrial use. The increase in the price of oil is what has led to the development of some states like Texas in the recent years. Chevron and Royal Dutch Shell which are the leading oil production companies in the United States recently recorded an increase in their profits compared to what they used to make four years ago. This is why they are making efforts of ensuring that they produce many barrels per day.













