Business Economics: Group Coursework 2020

A Report on the Market for Oil

The chart below shows movements in the price of oil since 1947, measured as US dollars per barrel.
The task for your group is to discuss the nature of the oil market and provide a plausible explanation
for the path of oil prices. The coursework provides an opportunity for your group to show that you can
apply economic reasoning in a practical context. You should discuss in general terms the forces
determining movements in price over the entire period, highlighting (what you think are) any
significant changes in market behaviour over relevant sub-periods. You should also pick one ten-year
period and analyse in more detail the behaviour of the oil price over that period.

The structure and content of the report is for your group to decide, but you need to give attention to
the following:

a) Show how the framework of demand and supply can be used to explain the movements of
price over the entire period, and over your chosen 10 year sub-period, utilising appropriate
analytical concepts, such as long-run and short- run market adjustments, demand and supply
elasticities, market shocks, etc..
b) Discuss which of the various models of industry structure and pricing behaviour is most
appropriate for examining the behaviour of the oil market and what insight it provides about
the behaviour of the oil price.
c) Briefly assess the factors that are likely to determine the future path of the oil price

Clarity of presentation, as well as the strength of the analytical content, will be taken into account
when the report is marked. The maximum word limit for the report is 2500 words. Do NOT exceed the
word limit and do NOT attach any appendices to the report. Any appendices attached to the report will
be disregarded. Any additional statistics, charts or diagrams should be included, with accompanying
discussion, only in the main body of the text. Any content beyond the word limit will also be
disregarded.
The submission date for the report will be notified on the HUB. Late submission of the report will be
penalised in line with Business School policy.