Text 4. Supply and Demand

As a proportion of the total, by far the greatest demand for oil and other petroleum products comes from the commercial sector which uses oil for heating and transportation. Oil demand is also seasonably variable as the countries of the Northern hemisphere, who dominate global oil consumption, consume more oil in the winter for home heating. In fact, the United States alone represents nearly 60 % of global oil demands and a particularly cold winter in North America can strongly affect global prices.

High demand is led by the U.S. market, the source of increasing percentage of the world’s demand for petroleum. The U.S. economy currently accounts for one-quarter of all demand. New demand is also coming from emerging industry in third world nations, including India and especially China which is developing a western-style car culture and whose manufacturing bases have grown very rapidly in recent years.

According to U.S. Department of Energy Information Admi-nistration the world increase of energy sources consumption is estimated of 3,4%, in particular:

• China is of 38.9 %

• US is of 19.4 %

• Asia outside Japan and China is of 13.8%

• Canada is of 4 %

• UK is of 3.5 %

• combined other non-OECD countries is of 21 %.

There are a number of reasons why oil traders feel that oil supplies might be reduced. One of the most important is growing turbulence in the Middle East, the world’s largest oil producing region. The war in Iraq, Iran’s nuclear program, and questions about Saudi Arabia’s internal stability all could in the future lead to a dramatic fall in the supply of oil. Outside the Middle East other oil producers have worried investors with political problems in Venezuela and potential instability in West Africa.

In late August, 2005, Hurricane Katrina crippled the supply-flow from off-shore rigs in the Gulf Coast, the largest source of oil for the domestic U.S. market. Short-term shutdowns knocked out two major on-shore pipelines and at least 10 % of the nation’s refining capacity was not operating in the wake of the storm. Gas prices in the region raised from 70 cents to $3.12 on August 30.

World supply came to 83 million barrels a day during 2004 according to the department of energy calculations. This rate of increase is faster than that of any other date in the past. Despite this there is increasing discussion of peak oil and the possibility that the future may see a reduced supply of oil. Even if oil supplies themselves are not reduced some experts feel the easily accessible crude sources are almost exhausted and in the future the world will depend on more expensive sources of oil.

Some people and news agencies argue that labour strikes, hurricane threats to oil platforms, fires and terrorist threats at refineries, and other general problems are responsible for the higher gas prices. Critics argue that these problems periodically push price higher, but that they are not fundamental or long term enough to cause the large jump in gas price.

Others believe that the price of oil is almost entirely speculative, and that the increase in price is extending into the long term. Due to oil speculation these people argue that speculators foresee increasing demand, decreasing supply, or both, leading to a long - term increase in the price of oil. If these speculators are wrong, current prices may actually be a price bubble, and the price could thus collapse.

Still other suggest that the main issue is a lack of energy efficiency in industry. These analysts believe the problem would be solved by increasing the efficiency of factories, homes and transportation and easing the demand crunch by using less energy and more renewable energy.

Exercise 45. Find universal words in text 4. Compare their pronunciation and spelling in English and Ukrainian. Use a dictionary for translation.

Exercise 46. Translate the verbs and their derivatives.

To produce – production – producer – productive – productivity; to strike – striker – striking; to speculate – speculation – speculator – speculative; to supply – supplied – supplying – supplier; to account – accounting – accountant – accountability; to consume – consumption – consumer; to operate – operated – operating – operation – operator; to calculate – calculation – calculator – calculated – calculating; to refine – refiner – refinery – refining; to manufacture – manufacturer – manufacturing.

Exercise 47. Explain the formation of the following words.

Short-term, on-shore, off-shore, hemisphere, non-OECD, non-producing, western-style, one-quarter, outside, supply-flow, foresee, irresponsible, percentage, renewable, greatest, shutdown, domestic, normally, faster, easily, accessible, periodically, fundamental, higher, instability, lessen, efficiency.

Exercise 48. Match the antonyms.

Increase instability supply long-term expensive gain internal producer less retail

consumer loss external wholesale decrease short-term more demand cheap stability

Exercise 49. Give synonyms to the following words.

Delivery, manufacturer, to drive up, stop, use, fall, internal, cost, fast, decrease, clean, influence.

Exercise 50. Translate attributive ‘noun + noun’ combinations.

Oil trader, oil product, oil consumption, energy market, Energy Information Administration, western-style culture, off-shore rig, on-shore pipeline, gas price, oil supplier, energy source, labour strike, terrorist threat, energy efficiency, demand crunch, world supply, refinery capacity, petroleum product, oil demand, non-OECD country, world increase, nuclear program, oil producer, short-term shutdown.

Exercise 51. Match English-Ukrainian equivalents.

1. oil consumption 2. gas price 3. energy efficiency 4. oil supplier 5. world-consumption increase 6. refining capacity 7. renewable energy 8. peak oil consumption 9. increasing demand 10.rate of increase

a) енергетична ефективність b) постачальник нафти c) виробнича потужність очисних споруд d) споживання нафти e) ціна на газ f) максимальне споживання нафти g) збільшення світового споживан-ня h) темп зростання i) відновлювана енергія j) підвищений попит

Exercise 52. Mark the given statements: T – for true or F – for false. If the statement is wrong, give the correct version. If right, enrich it with details.

1. High supply is led by the U.S. market, the source of increasing percentage of the world’s demand for petroleum. 2. New demand is also coming from emerging industry in third world nations. 3. One of the most important reasons why oil supplies might be reduced is growing turbulence in the Middle East. 4. The easily accessible sources of light sweet crude are renewable. 5. Labour strikes, hurricans, fires and terrorist threats at refineries cause a large jump in gas price. 6. Some analysts believe that the increase in price is due to oil speculation.

Exercise 53. Fill in the gaps with the missing words from text 4 and translate the sentences.

1. The countries of the Northern hemisphere dominate global …. 2. A particularly cold winter in North America can strongly affect global … . 3. A number of reasons could lead in the future to a dramatic … in the supply of oil. 4. There is increasing discussion of … and possibility that the future may see a reduced … . 5. Some experts feel the easily accessible sources of crude … are almost … . 6. Some people and news agencies argue that some general problems are responsible for the higher … . 7. Others believe that the price of oil is almost entirely speculative and could thus … .

Exercise 54. Translate the following sentences into English.

1. Надзвичайно великий попит на нафту та нафтопродукти походить від комерційного сектора. 2. Потреба у нафті змінюється також залежно від пори року, оскільки країни північної півкулі споживають більше нафти узимку для обігріву домівок. 3. Потреба у нафті економіки Сполучених Штатів складає чверть світового попиту. 4. Новий попит також виникає у зв’язку з появою промисловості у країнах третього світу. 5. Існує ряд причин, чому постачання нафти може скоротитися. 6. Не дивлячись на темп зростання постачання нафти на світовому ринку, виникають дискусії про можливість скорочення постачання нафти. 7. Деякі експерти вважають, що у майбутньому світ покладатиметься на більш дорогі джерела нафти. 8. Деякі агентства вважають, що такі загальні проблеми, як страйки, урагани, пожежі та загроза тероризму призводять до підвищення цін на газ. 9. Експерти вважають ціну на нафту суцільно спекулятивною завдяки біржовим іграм. 10. Проте інші аналітики висловлюють думку, що основна причина скорочення постачання нафти – це недостатня ефективність споживання енергії промисловістю.

Exercise 55. Compose a dialogue on “Energy Supply and Demand”.

Exercise 56. Read and learn the vocabulary to text 5.

Fuel – постачати паливо, пальне

commodity – предмет споживання; товар, продукт широкого вжитку

trader – торговець, комерсант

commuter – пасажир, що здійснює постійні поїздки

(тут: залізницею)

goods – товари

distinguish – вирізняти

fluctuate – коливатися, змінюватися

imposed – вимушений

point in time – момент часу

load – навантаження

motion – рух

versatility – різноманітність; гнучкість

competitor – конкурент

densely – щільно

density – щільність; концентрація; напруження; інтенсивність

mesh – переплітатися

feature – характерна риса; характеризувати(ся)

dispersed – розкиданий, розташований на відстані

bundle – зв’язувати

pool – об’єднувати

capacity – ємність

grid – мережа

natural monopoly – природна монополія (виняткове право встанов-

лення більш низьких цін на вироблену продукцію)

generation – вироблення

generator – виробник (електроенергії)

agglomeration – скупчення; територіальна концентрація

remote – віддалений

billing – сплачування рахунків за спожиту електроенергію

activities – види діяльності, заходи

customer – споживач; покупець, замовник, клієнт

advice – повідомлення; консультація

financing – фінансування; ведення фінансових операцій

wholesale – гуртовий; гуртова торгівля

retail – роздрібний; роздріб

reseller – той, хто перепродає

purchase – купівля

in bulk – оптом, у великому обсязі

Exercise 57. Read, translate and give the gist of text 5.