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Full Length Research Paper
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The SEEDS of
oil price fluctuations: A management perspective
Shih-Chi Chang
Department of Business Administration,
National Changhua University of Education,
No. 1, Jin-De Road, Changhua City 500, Taiwan.
E-mail:
shihchi@cc.ncue.edu.tw.
Tel: 886-4-7232105 ext. 7416 Fax: 886-4-7211292
Accepted 1 June, 2010 |
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Abstract |
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In view of unreasonable oil price fluctuations, this paper
reviews past researches to propose a SEEDS framework to analyze
the forces that influence oil price fluctuations. The SEEDS
framework discusses oil price fluctuations from the supply side,
environmental protection side, economic side, demand side and
substitute side. According to SEEDS, we believe the rapid
increase in oil price is not good for both net oil exporters and
net oil importers. Of course, nobody doubts that crude oil
reserves are limited. We also believe that oil prices would
continuously increase, but not double or triple within one year.
The global economy cannot endure sharp increase in manufacturing
costs and product prices. This would reduce consumption and
production at the same time, followed shortly by financial
market crisis. Recognizing the symbiosis of net oil exporters
and net oil importers is very important; we believe that this
framework will help people understand that rapid increases in
oil price are dangerous to world economics. The SEEDS framework
can also be applied to analyze the price fluctuations of bulk
commodities.
Key words:
SEEDS, oil price, price fluctuation. |
