Discussion prompts: If supplies have increased, the trend is often for the price to go down. New technology is being developed all the time to access oil reserves that have been too remote to find and extract in the past. Students could research some of these approaches as a follow-up to the game. Further research: Times Online: Iraq’s revival boosted as oil production rises to 2.4 million barrels a day

Background information: The Organization of the Petroleum Exporting Countries (OPEC) is a group of countries (12) that produce most of the world’s oil and control most of the world’s oil exports. They are interested in seeing that petroleum resources held by member countries will continue to provide income to those countries in the future. 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. Discussion prompts: To help students understand the significance of slashing oil production by half a million barrels a day, release the following information: In July 2008, Saudi Arabia was producing 9.7 million barrels a day (source Daily Telegraph). OPEC may be reducing production to prevent oil prices falling too much or to preserve oil supplies. If demand exceeds supply, the price is likely to go up. Further research: BBC News: OPEC head urges production cuts

Discussion prompts: Although the news was ‘just a rumour’, the implication is that confidence in the market was a little shaken. Demand was expected to outstrip supply and so push the price of oil higher. In addition to reliable information, the market also contains unreliable information, and as long as enough people believe that a factor will affect the oil price, it will. How does the fresh news affect the teams’ ‘market view’? Do they think the trend is one of stability? 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: BBC News: OPEC talks push oil prices higher

Discussion prompt: Oil pipelines are a target for terrorists, smugglers and saboteurs and there are many reports in recent years of strategic oil lines being breached. Further research: The Independent: Militants sabotage crucial Iraqi oil pipeline

Discussion prompts: This news is likely to invoke a fairly neutral response on the market. One of the guidance points indicates that the country in question is not involved in the production of oil. Unrest in the country may affect its immediate neighbours, but the indication is that none of these countries is oil producing. Teams could also consider how large a consumer of oil the country is likely to be.

Discussion prompts: The habits of American consumers affect oil prices. The advent of the US summer driving season has a historical effect of increasing the price of gasoline and therefore an impact on the price of crude oil. Further research: Energy Information Administration website: A primer on gasoline prices

Discussion prompts: If supplies increase, the price is likely to go down. The teams should remember that Saudi Arabia is especially influential in terms of the quantity of oil released from its oil fields. Ask the teams to consider the possibility of strike action. Do they think this is likely to happen? If so, how might this affect the supply of oil? Further research: CNN Money: Saudi Arabia to produce more oil

Discussion prompts: If supplies, including production and distribution, are threatened, the price is likely to go up. The Gulf of Mexico is one of the biggest production regions of crude oil. Further research: BBC News: Oil price up on hurricane fears

Discussion prompts: There are a number of options for low-carbon vehicles, including electric cars and hybrid cars (which use electric and petrol power). Low-carbon vehicles help in the continuing fight against climate change as they emit less CO2 into the atmosphere. There are also financial benefits as fuel costs should be lower than that for standard vehicles. This policy could lead to an increase in the number of low-carbon vehicles on the roads throughout Europe. The demand for fuel could drop as these vehicles use less fuel – or no fuel – than standard vehicles. However, it is unlikely that it would have a dramatic affect on the price of oil in the short term, as the increase in demand is likely to take place over a longer period of time. 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: Sustainable Cities: Encouraging low carbon technologies and fuels

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