Discussion prompts: The attacks could lead to panic buying of oil if large oil purchasers such as manufacturing companies and airlines believe that future supplies of oil could be difficult to secure, or if they expect the price to rise. Alternatively, terrorist attacks on this scale could reduce the amount of global economic activity, decrease international trade and flatten the demand for oil and price. Further research: The Independent: Terror fears push oil price to 22-year high

Discussion prompts: Sometimes markets can react quickly and with volatility to a major and unexpected event. Markets are constantly buffeted by the forces of supply and demand and firms can store oil stocks even though prices are high, to protect against future price rises. Further research: Times Online: Petrol panic begins to spread as oil prices rise

Discussion prompts: A reduction in market activity is likely to have a significant impact on oil consumption, with consumers and companies demanding less of it. Remind teams that they could consider taking a larger risk if they are sure of the future direction of the market. They have the choice to sell their remaining oil now or to wait until the final market price. If playing the Standard game, teams must ensure they are not ‘short’ at the end of this round. This means they haven’t bought enough oil to meet their futures contracts, and will be penalised. However, if they are ‘long’ (they’ve bought more than they have sold), they can choose to either balance their position now, or wait and sell oil at the final market price. They won’t be penalised for this. Further research: Reuters: Oil falls seven percent on demand, economy worries

Discussion prompts: A strong economy often leads to a greater demand for oil. Rapidly increasing economies in countries such as India and China have been seen to contribute to a greater demand for oil. If the boom does fade, would this have a significant impact upon the demand for oil? Further research: MoneyWeek: Bust will follow boom – but when?

Discussion prompts: A ‘credit crunch’ refers to the reduction in the general availability of loans (or credit), or a sudden tightening of the conditions required to obtain a loan from the banks. Ask students to consider how a recession may affect the supply and demand of oil. With a rise in unemployment and a falling demand for goods and services, the consumption of oil is likely to also decline. Further research: BBC News: Timeline: Credit crunch to downturn

Discussion prompt: Teams need to consider what this ‘bounce back’ might mean in terms of the supply and demand of oil, and the extent to which they think the markets have recovered. Further research: BBC News: UK economy bounces back

Discussion prompts: Teams will need to consider whether the boost to the economy might affect the price of oil. Strong economic activity in the main oil consuming countries, such as the US and China, can often lead to a greater demand for oil. Further research: The New York Times: Fed acts to rescue financial markets

Discussion prompts: If supplies increase, the price is likely to go down. Sometimes firms can see a high(er) price and react quickly to capitalise on it and make a short-term ‘hit and run’ profit. If everyone does this, then output can rise in response, causing market prices to fall. Further research: The Independent: OPEC to increase production and drive prices down

Discussion prompts: The oil price has dropped since the last round in light of over-production. OPEC reacts to developments in the oil market by adjusting the oil output of member nations to help ensure a balance between supply and demand. Teams need to weigh up whether the refusal of one leading oil producer will have much of an impact on the overall supply of oil. Remind them that they could consider taking a larger risk if they are sure of the future direction of the market. They have the choice to sell their remaining oil now or to wait until the final market price. If playing the Standard game, teams must ensure they are not ‘short’ at the end of this round. This means they haven’t bought enough oil to meet their futures contracts, and will be penalised. However, if they are ‘long’ (they’ve bought more than they have sold), they can choose to either balance their position now, or wait and sell oil at the final market price. They won’t be penalised for this. Further research: The Independent: OPEC cuts production to shore up falling oil prices

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