Crude Oil Questions (Essay Sample)

Crude oil
1. For each year, calculate how much the US economy spent on crude oil as a percentage of GDP. Then have a look at the year to year change for each period, 1978-1982 and 2004-2009. (12 points)
ANSWER:
Years

Price per barrel

cost
(billion)

GDP (billion)

Percentage
Of GDP

1978

$9.05

49.54

6420.288

1.8123%

1979

$11.7

64.05

6503.874

1%

1980

$21.52

117.82

6501.184

1.8123%

1981

$31.68

173.44

6585.127

2.63%

1982

$28.12S

153.95

6493.128

2.37%

Source: ST. Louis Federal Reserve Bank
Spending on crude oil in 1978,
15 million barrels per day *365 days a year = 5475 million barrels per year
5475 MBPY* $9.05 per barrel / 1000 = (49.54 billion)
49.54 billion / 6420.288 billion = (0.77% of GDP for 1978)
Spending on crude oil in 1979,
15 million barrels per day *365 days a year = 5475 million barrels per year
5475 Mbpy* $11.7 per barrel/1000 = (64.05 billion)
64.05 billion / 6503.874 billion = (1%)
Spending on crude oil for 1980,
15 million barrels per day *365 days in a year =( 5475 million barrels per year)
5475 Mbpy* $21.52 per barrel/1000 = (117.82 billion)
117.82 billion / 6501.184 billion = (1.8123%)
Spending on crude oil for 1981
15 million barrels per day *365 days in a year = 5475 million barrels per year
5475 Mbpy* $31.68 per barrel/1000 = (173.44 billion)
173.44 billion / 6585.127 billion = (2.63% of the GDP)
Spending on crude oil for 1982
15 million barrels per day *365 days in a year = 5475 million barrels per year
5475 Mbpy* $28.12 per barrel / 1000 = (153.95 billion)
153.95 billion / 6493.128 billion = (2.37% of the GDP)
Now from 2004 to 2009
years

Price per barrel

cost
(billion)

GDP
(billion)

Percentage of GDP

2004

$37

212.02

13950.376

1.5198%

2005

$50

286.52

14373.438

2%

2006

$60

343.83

14716.930

2.33%

2007

$68

389.67

14991.784

2.599%

2008

$95

544.39

14576.985

3.73%

2009

$62

355.29

14541.901

2.44%

Source: ST. Louis Federal Reserve Bank
Spending on crude oil in 2004:
15.7 million Barrels per day* 365 days in a year = 5730.5 million barrels per year
5730.5 Mbpy * $37 per barrel/1000 = (212.02 billion)
212.02 billion/ 13950.376 billion*100 = (1.5198% of GDP for 2004)
Spending on crude oil in 2005:
15.7 million Barrels per day*365 days in a year = 5730.5 million barrels per year
5730.5 Mbpy * $50 per barrels /1000 = (286.52 billion)
286.52 billion/ 14373.438 billion*100 = (2% of GDP for 2005)
Spending on crude oil in 2006
15.7 million Barrels per day * 365 days in a year = 5730.5 million barrels per year
5730.5 Mbpy * $60 per barrel / 1000 = (343.83 billion)
343.83 billion/ 14716.930 billion*100 = (2.33% of the GDP)
Spending on crude oil in 2007
15.7 million Barrels per day*365 days in a year = 5730.5 million barrels per year
5730.5 Mbpy * $68 per barrel/1000 = (389.67 billion)
389.67 billion/ 14991.78...