To date the nigerian violence has resulted in the

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disrupt the country’s oil production. To date, the Nigerian violence has resulted in the shut-in of 500,000 barrels of oil per day at a time when global production only exceeds consumption by about two million barrels of oil per day. Gasoline futures surged as well due to a production slowdown resulting from a Texas refinery that sustained lightning-related fire damage and subsequent disruption in output. Elsewhere, OPEC decided to leave its output quotas unchanged. Growth in global oil demand slowed a little but remains strong with U.S. gasoline demand up about one per cent over the same period last year. Analyzing the News A number of factors other than a change in price have impacted the potential supply of oil. These all culminate in a decrease in oil supply, or expected decrease, and subsequent increase in the price of oil.
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CHAPTER 4 Summary: Key Points in the Article Cocoa futures are riding high due to drought, political unrest, and changing consumer tastes. Two major factors have combined to restrict the supply of cocoa; a drough t in Western Africa and civil unrest in the Ivory Coast. The Ivory Coast is the planet’s biggest producer of cocoa. The result is a 5.5% drop in the production of cocoa over the previous year. Cocoa prices have responded accordingly and are near a three year high with prices increasing by 44% since November 2005. The demand side is also affecting prices. Consumer tastes have shifted toward darker chocolates and dark chocolate requires more cocoa to manufacture. The change in preference is driven partially by health reasons. Dark chocolates are higher in antioxidants and considered to be healthier than other chocolates. Some studies link dark chocolate consumption to lower blood pressure. Since dark chocolates are also higher margin products, manufacturers have been happy to oblige. However, the combined effect of the supply and demand factors is a certain recipe for higher cocoa prices. Analyzing the News Note that both the supply and demand shifts would result in a higher cocoa price taken in isolation. Since all three factors have hit this market simultaneously, it is not surprising that prices have risen as rapidly and are substantial increases.
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CHAPTER 4 Summary: Key Points in the Article The rising price of gold as a jewelry input has pushed many consumers to postpone jewelry purchases. The result is that gold traders are becoming more cautious about the current price level until it is determined how much of the current $900 price is the result of inflation hedging and how much is derived from jewelry demand. Meanwhile global output fell about 1 percent last year as production costs increased. Many traders indicate that jewelers have evaporated from the gold market. Meanwhile many jewelry items are being melted down and returned to the market as scrap to take advantage of the current high prices. Much of the demand appears to be investor driven as stocks tumble and interest rates fall.
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Christopher Reinemann
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