Oil Price Volatility does this effect UK Governments
In economics, things take longer to happen than you think they will, and then happen faster than you thought they could.
Rudi Dornbusch (b. 1942, d. 2002) German economist
If one assumes oil prices follow a lengthy cycle of ups and downs, then the recent dramatic fall in the price of crude oil from over $100/bbl in 2011, to less than $40/bbl in the spring of 2016, could likely lead to a long period of sustained low prices. Based on this cycle theory, and historical precedents, then oil prices will recover; but when, how rapidly, and to what level remains to be seen.
Lower oil prices might lead in the longer term to users of other energy converting back to or substituting to oil from perhaps cleaner forms of energy. This might prove a challenge to the UK Governments commitment to reducing greenhouse gas emissions and a low-carbon future.
Lower crude oil prices quickly feed through to consumer petroleum product prices, thereby increasing household disposable income, in turn driving demand for non-energy goods and services. This will cause inflationary pressures on the UK
Governments inflation targets, and its monetary and fiscal policies designed to stimulate the countrys Gross Domestic Product (GDP).
Your assignment task is to research how the UK Government has dealt with oil price volatility historically when faced with dramatic swings in the commodity crude oil price, and whether any mathematical model or process exists in guiding strategic fiscal and monetary policy.
In your report you should detail the findings of your research, fully interpret these findings and then synthesise into any recommendations to deal with future oil price shocks. In particular, you may care to investigate and debate:
The UK Governments reaction in its monetary and fiscal policies in response to the oil price falls in 1985 and 1998
How the UK Government adjusts its fiscal policy towards North Sea Oil & Gas exploration and exploitation investment in the light of falling oil prices.
Your own interpretations and conclusions from your researches are fundamental. Supporting your own arguments, in a robust and objective manner will qualify for better marks than a simple re-statements of data and facts uncovered in your reading.
Analyse the impact of changes in government monetary and fiscal policies on the prosperity and
Long term planning of the oil and gas industries
Please Havard style of referencing. Referencing can be more or less than 15. Thank you