Exploring concentration of capital finance and markets and their possible implications in oil and steel sectors

Abstract

Oil is the most heavily traded commodity in foreign trade as it drives the world economy by fuelling increasing demand for petroleum products and alternate energy sources such as ethanol and natural gas. The volatility in the 2008 oil market has been very dynamic with oil prices shooting up to $ 137.11 to $ 36, all between a period of six months. The figure below can give you a graphical picture of the trend in world crude oil prices over the past two years. The extreme dip in prices in December was of course due to the global crisis that hit hard supply, demand and cost mechanics of the major oil companies forcing the price decline. In the past however, the period between 1881 and 1973 seems especially stable. During this time frame, when prices were regulated by large, vertically integrated companies, the oil price managed to stay within a fairly narrow price range (US$10-30/bbl).