Please answer below in 350 word limit in APA format
1. Read the two articles below that discuss why fuel prices fluctuate. Research two of these types further.
2. Locate two JOURNAL articles which discuss this topic further. You need to focus on the Abstract, Introduction, Results, and Conclusion. For our purposes, you are not expected to fully understand the Data and Methodology.
3. Summarize these journal articles.
Need to reply to 2 classmates posts with 150 word each. Please see the attached document for classmates posts
Classmate 1: Due to its unique characteristics and strategic significance (including supply, demand, and other traditional market power, as well as the competitiveness of all economies worldwide), the factors that cause the global fluctuation of petroleum prices are complex, as can be seen from a historical perspective. The variety of factors influencing its growth, as well as the magnitude of its impact, which can always vary from one historical point to the next, are all contributing to the expansion of the global economy. (Krauss, Clifford 2020) The number of factors that influence international oil prices makes it harder to predict global oil prices by train because the price of oil exploration is affected by one or more variables. The Chinese economy, which is the third-largest oil consumer and the second-largest oil user, is severely impacted by the dramatic fluctuations in global oil prices. Fuel prices fluctuate due to a variety of factors, including national politics and the global economy. Customers all over the world are impacted by this constantly evolving market. People can make more informed decisions about their transportation needs and budgets if they understand why fuel prices fluctuate.
One article discussed why fuel prices fluctuate due to supply and demand in the oil market. The article noted that higher or lower demand for oil often leads to higher or lower fuel prices respectively. Moreover, it stated that when there are disruptions in supply, whether due to war or natural disasters, this can also cause price changes as well as discrepancies between different markets worldwide. (Kelly, Stephanie; 2021)
Another article explored how political factors such as taxes and subsidies could the impact pricing of fuels like petrol and diesel. It suggested that since governments heavily control these products, any shifts in policy would affect how much people pay at the pump.
Classmate 2:
Fuel, like any product, has its highs and lows regarding its availability in the market. Pricing is a critical marketing element that determines the customers’ response to the products in the market. Any disruption in the key processes involved in fuel production can adversely affect its pricing in the long run (Kellogg, 2018). The top management should hence ensure that they streamline all the key operations using the fittest strategies to satiate the customers and other players that contribute to the overall growth of the firms.
The cost of the raw material processed to get the end products of petroleum is the primary determinant of fuel pricing. The demand and supply of crude oil in the global market must be stabilized for the fuel to be available at stable rates. The key players are still working on ways to source crude oil at affordable rates to address the issues revolving around fluctuating prices. The inflation rate cannot be left out as it is among the current global crises which have led to increased product prices, fuel being among them (Kellogg, 2018).
The refinery expenses also contribute to the changes in the prices as the different seasons, especially the summer blends, tend to be higher than other blends sold in the year. In the summer, there must be about 15 fuel types to meet the client's expectation in the states, which is not the case in the winter, where the amount decreases (GOH et al., 2022). When the supply of fuels decreases below the supply expectations, the refineries must increase the prices to meet their expectations.
The formulation of the fuel also matters when it comes to pricing. For instance, in the United States, different parts of the country use different formulations to prevent the amount of “volatile organic compounds” released into the surroundings, which are hazardous to living organisms, especially people and animals (Voisin, 2019).