I need 3-5 lines I attach The question for my prof on topic file Middle Eastern Oil producing countries also I attacges artical to help u understand I need focus on Saudi Arabia oil Document Preview:...

I need 3-5 lines

I attach The question for my prof on topic file

Middle Eastern Oil producing countries

also I attacges artical to help u understand

I need focus on Saudi Arabia oil

Middle Eastern Oil producing countries we have a large number of students from the Middle East, mainly Saudi Arabi, in this class, I hope that they can teach us something about their part of the world. It is my understanding that in the United Arab Emirate, Saudi Arabia, and other GCC countries, politics which is under the control of a family dominates economics. Daron Acemoglu and Jane Robinson argue that such a system is unsustainable in the long run; are they right? Can such a system satisfy the demand of the population, especially the young who are educated abroad and have access to the internet? http://www.econbrowser.com/archives/2012/09/thresholds_in_t.html Econbrowser Analysis of current economic conditions and policy « Global Imbalances | Main September 19, 2012 Thresholds in the economic effects of oil prices As U.S. retail gasoline prices once again near $4.00 a gallon, does this pose a threat to the economy and President Obama's prospects for re-election? My answer is no. The graph below plots average U.S. gasoline prices, adjusted for inflation, over the last decade. This is now the fourth time we've been near the $4 threshold. It first happened in June 2008, again in May 2011, and again in April of this year. In fact, on each of those previous 3 occasions the average U.S. retail price of gasoline was higher than it is today. Figure 1. Monthly real gasoline price, Jan 2002 to Sep 2012. Data source: monthly gasoline price from EIA, with value for September representing the weekly September 17 value. Expressed in units of August 2012 dollars by multiplying by ratio of August CPI (from FRED) to that of the reported month. The first time something like this happened in 2008, it was quite a jolt to consumers and to the economy. In fact, the U.S. is still in the process of adjusting to that shock 4 years ago. The vehicles that many Americans were driving at the time just don't make sense if you have to pay $60 or more every time you visit the gasoline station. Even so, you don't get rid of the old gas-guzzler right away, but make sure you change when you buy a new one. The average fuel economy of new U.S. cars purchased has been steadily increasing since 2008. Figure 2. Average sales-weighted fuel economy of purchased new vehicles for October 2007 through August 2012. Source: UMTRI (hat tip: Peak Energy and Early Warning). Total vehicle miles traveled also takes time to adjust, as people change their home, job locations and other habits. Figure 3. Moving 12-month total of vehicle miles driven on all U.S. highways through June 2012. Source: Federal Highway Administration. The initial adjustments associated with that process were quite disruptive to the economy. For example, sales of light trucks and SUVs manufactured in North America plunged in the first half of 2008, and the hit to the auto sector made an important contribution to the first year of the Great Recession. Sales of this category for August of this year were still 20% below the average August value over 2003-2007. Figure 4. Data source: Webstract. By contrast, sales of lighter cars are now back up near their historical average, allowing the auto sector to be able to make a solid contribution to recent U.S. economic growth. Figure 5. Data source: Webstract. It's also interesting to look at how the response of consumer sentiment to gasoline prices has changed over time. The blue line in the graph below shows the same real gasoline price series plotted in Figure 1 above, except now drawn on a negative scale (shown on the right-hand axis); that is, the lower the blue line, the higher the price of gasoline. I plot it this way to highlight its relation to consumer sentiment, shown in black and labeled on the left-hand axis. When real gasoline prices first reached $3.50/gallon in 2005, consumer sentiment plunged sharply. When it happened again in 2006, the response was more modest, and on the third time in 2007, it didn't seem to faze consumers. It was only when gasoline prices went on from there to make new highs in 2008 that we saw sentiment plunge again. Figure 6. Consumer sentiment and negative of real gasoline prices, Jan 2002 to Sep 2012. Black line: Reuters/University of Michigan index of consumer sentiment (left scale). Data source: compiled from contemporary news accounts. Blue line: negative of real retail price of gasoline (right scale), from Figure 1. By the second time gas threatened $4/gallon in the spring of 2011, the memory of 2008 had receded somewhat, and consumer sentiment fell sharply. It was much more muted when the same thing happened again just one year later. And right at the moment? Consumers seem to be shrugging it off. Nobody is surprised this time, having seen the same thing twice before over the last year and a half. Many of the adjustments people are making today were in fact set in motion 4 years ago. There is quite a bit of empirical support for the claim that the second or third time oil prices move back near a previous high, the economic disruption is significantly less than the first time; see for example the evidence and literature reviewed in my 2003 Journal of Econometrics paper (ungated version here) and two recent surveys [1], [2]. $4/gallon? Been there, done that. Posted by James Hamilton at September 19, 2012 12:40 PM htt p://www.econbrowser.com/archives/2012/09/thresholds_in_t.html Econbrowser Analysis of current economic conditions and policy « Global Imbalances | Main September 19, 2012 Thresholds in the economic effects of oil prices As U.S. retail gasoline prices once again n ear $4.00 a gallon, does this pose a threat to the economy and President Obama's prospects for re - election? My answer is no. The graph below plots average U.S. gasoline prices, adjusted for inflation, over the last decade. This is now the fourth time we've been near the $4 threshold. It first happened in June 2008, again in May 2011, and again in April of this year. In fact, on each of those previous 3 occasions the average U.S. retail price of gasoline was higher than it is today. http://www.econbrowser.com/archives/2012/09/fat_fingers_and.html September 23, 2012 Fat fingers and the price of oil Can the wild swings in the price of oil over the last few weeks have anything to do with supply and demand? NYMEX November crude oil. Source: ino.com. The Wall Street Journal carried this account last week: Oil prices dropped more than $3 in less than a minute late in the trading day on Monday, just as trading volume spiked. The move also dragged down prices of gold, copper and even the euro. "Traders were looking like deer in the headlights," said Peter Donovan, a floor trader at Vantage Trading on the New York Mercantile Exchange. "I called four different desks, and they all said, 'we don't know.' " The move came at about 1:54 p.m. EDT. West Texas Intermediate crude for October delivery plummeted to $94.83 a barrel on the Nymex, from more than $98. Some 12,500 contracts changed hands in a minute, compared with less than 500 a minute previously. The move sparked talk of an erroneous trade—called a "fat-finger" error in industry parlance—or a computer algorithm gone awry. Fat finger or no, there was an even bigger drop on Wednesday, leaving the price of West Texas Intermediate well below where it had been prior to Fed Chair Ben Bernanke's Jackson Hole speech on August 31 and the Fed's announcement of QE3 on September 13. NYMEX November crude oil. Source: ino.com. Those who doubt that oil prices are determined solely by fundamentals would naturally ask, what aspect of the supply or demand for oil could have possibly changed in the course of less than a minute last Monday? The obvious and correct answer is, there was no change in either the supply or the demand for physical oil over the course of that minute. The minute-by-minute price of a NYMEX contract is determined by how many people are wanting to buy that financial contract and at what price, not by how much gasoline motorists burned in their cars that minute. But since changes in the price of crude oil are the key determinant of the price consumers pay for gasoline, doesn't that establish pretty clearly that the whims or fat fingers of financial traders are ultimately determining the price we all pay at the pump? In one sense, the answer to that question is yes-- last week's decline in the price of crude oil will soon show up as a lower price Americans pay for gasoline. But here's the problem you run into if you try to carry that theory too far. There are at the end of this chain real people who burn real gasoline when they drive real cars. And how much gasoline they burn depends in part on the price they pay-- with a higher price, some people use a little bit less. Not a lot less-- the price of gasoline could change quite a lot and it would take some time before you could be sure you see a response in the data. That small (and often sluggish) response is why the price of oil can and does move quite a bit on a minute-by-minute basis, seemingly driven by forces having nothing to do with the final users of the product. But if the price of oil that emerges from that process turns out to be one at which the quantity of the physical product that is consumed is a different amount from the physical quantity produced, something has to give. Indeed, the bigger price drops we saw on Wednesday followed news that U.S. inventories of crude were significantly higher than expected: Oil dropped to a one-month low after U.S. crude inventories surged the most since March as production and imports rebounded from Hurricane Isaac. Futures decreased as much as 3.3 percent after the Energy Department said supplies rose 8.53 million barrels last week, more than eight times what was projected in a Bloomberg survey. Imports arrived at the highest rate since January and output rose. Crude fell before the report on speculation Saudi Arabia is moving to reduce prices. U.S. crude oil inventories (millions of barrels). Source: This Week in Petroleum. There are several channels by which QE3 may end up influencing the quantity of oil physically produced and