Zebin Dholasaniya

Period: ISM 7th

ARTIFACT #2: Causes & Effects

Declining Gasoline Prices
CAUSES

EFFECTS

Weak economic activity and increased

efficiency
o
Low demand for crude oil
o
Technological advancements
Americas transformation into the
worlds largest oil producer
o
Limited exports, but decrease in
imports of oil from other countries
o
Shale formation (Shale rocks
that are rich resources for

petroleum and natural gas)

OPEC Organization of Petroleum
Exporting Countries cannot reach an
agreement on production curbs
o
Saudi Arabias refusal to curb
production because they have
numerous oil reserves and it is
cheaper for them to recover oil.
They do not want rival countries
like Iran and Russia to reap benefit
from a curb.

Transportation
o
Increased traveling and
transportation activity
Longer distancing power
Decrease in carpooling
o
Greater likelihood in purchasing
automobiles and gasolineoperated vehicles
Ingestion of oil, damages
internal organs
Employment
o
Crude oil floods market > Cost to
refine crude oil into gasoline
stays constant > Lower prices in
order to eliminate the excessive
supply > Companies lose
revenue > Companies lay off
workers > Unemployment rates
go up

Rising Gasoline Prices

CAUSES

Conflict in oil-producing countries

o
Capture of one of Iraqs oil
producing provinces
OPEC - Organization of Petroleum
Exporting Countries
o
Monitors oil supply and can ration
it out as they see fit, which sways
the supply and price of oil
Limitations in the availability of crude oil
o
Petroleum Non-renewable
resource = Limited supply = High
Demand. Low supply = High
prices

EFFECTS
Decrease in consumer spending
o
Income remains constant > Less
money to spend on goods and
services because more money is
going into purchasing gasoline.
Employment
o
Decreased traveling and
transportation activity
o
Purchasing rates for automobiles
and gasoline-operated vehicles
decrease