The price of crude oil takes into account the time and effort that went into creating it in nature. True or False ?
Answers
The answer is False.
Price of crude oil does not take into account the natural causes, that went into its making. The price is mostly dependent on global supply and demand. Other factors like market trend and oil futures contracts, also effect the price of crude oil.
In general, when the demand for oil is high and supply low, the oil prices will go up and vice versa.
The statement is true.The rise and fall of crude oil price is a prime factor of the economy for a country.
The variation of crude oil is a directly proportional variation of the price of petrol and diesel which has a great impact on transport and infrastructure for a country phenomenally vis a vis economy of the country.
Cost of extraction of crude oil and the processing of it are the prime causes of price variation. it's extraction and inclusion of crude oil for heat and gas generation are some of the reasons why crude oil is so important to any economy.