The demand for oil and gas is mainly dependent on the kind of economy
that a given country is operating in. For example, an agriculture based
economy like Pakistan is more dependent on fertilizers and water than
it is on oil and gas, well as an industrialized economy like China is
more reliant on fuel products for the operation of their factories and
advanced infrastructure. Secondly the demand for oil and gas is
dependent on how much supply and reserves are available in the country
domestically. A country where internal oil and gas supply is short will
be actively engaged in Energy Trading and Risk Management of shortfall of fuel and consequentially will have a high import bill for oil and gas products.
One can tell by looking at various resources for information such as the Global Energy Post that almost all the countries in the world are actively involved in energy trading and are largely affected by price movements in the underlying commodities. As such, these countries are in turn dependent on their people to demand and even supply of these products. Individuals and their purchasing powers determine their propensity to spend while their lifestyles dictate how much they would be willing to spend on products that are derivatives of oil and gas. For example, eco-friendly economies would try to minimize their reliance on such products and will look towards alternatives. Government regulation also comes into play here as more states are becoming aware of the risks associated with using renewable energy for the purpose of fuel or Electric Power.
Sudden exogenous factors may also affect the global demand supply position of oil and gas. Countries with excess reserves of currency may decide to trade them for procurement of oil and gas if it is predicting a price increase in the near future. Well, as countries that foresee a decline in prices and are holding an excess supply of oil and gas may attempt to sell their available stock quickly to avoid inventory losses from a price decline in the future.
One can tell by looking at various resources for information such as the Global Energy Post that almost all the countries in the world are actively involved in energy trading and are largely affected by price movements in the underlying commodities. As such, these countries are in turn dependent on their people to demand and even supply of these products. Individuals and their purchasing powers determine their propensity to spend while their lifestyles dictate how much they would be willing to spend on products that are derivatives of oil and gas. For example, eco-friendly economies would try to minimize their reliance on such products and will look towards alternatives. Government regulation also comes into play here as more states are becoming aware of the risks associated with using renewable energy for the purpose of fuel or Electric Power.
Sudden exogenous factors may also affect the global demand supply position of oil and gas. Countries with excess reserves of currency may decide to trade them for procurement of oil and gas if it is predicting a price increase in the near future. Well, as countries that foresee a decline in prices and are holding an excess supply of oil and gas may attempt to sell their available stock quickly to avoid inventory losses from a price decline in the future.
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