In this particular case, the invasion resulted in a cessation of crude oil in Kuwait, one of the world's major sources of crude oil. Further, for political reasons, the United States and other Western countries then refused to buy crude oil from Iraq; an action that further reduced crude oil supplies, as Iraq also was a major crude oil producer. Such supply reductions translate into increases in the price of crude oil.
Specification of the Variables for the Analysis
One dependent and four independent variables were included in the analysis of crude oil prices in the United States. The specifications of these variables are as follows:
1. Dependent variable [Price]. Crude oil prices in the United States, as stated above, represent a mean price determined and reported by the United States Energy Information Administration. Additionally, this mean price may be stated either in nominal terms (the price paid for the product in current dollars), or in real terms (the price of the product following an adjustment for the effects of price inflation over time. In this research, real prices for crude oil were used. The real prices reported by the United States Energy Information Administration used 1972 as the base year. As used in this research crude oil prices are stated in United States dollars to the nearest cent.
a. [Electric]. The proportion of electricity in the United States generated through the burning of petroleum used in this research included data reported by the United States Energy Information Administration. As used in this research, proportions are stated to the nearest tenth of a percent.
b. [Reserve]. The cost of finding new crude oil reserves is as reported by the United States Energy Information Administration. These costs, as used in this research, are real costs stated in United States dollars to the nearest cent.
c. [Import]. The proportion of imported crude oil in the total amount of crude oil...
Analysis of Changes in United States Crude Oil Prices. (1969, December 31). In LotsofEssays.com. Retrieved 22:16, May 29, 2015, from http://www.collegetermpapers.com/viewpaper/1303357014.html