The “Oily” economic mess – What happened? (Broken down in 650 words)

“The price has gone down AGAIN?”
“What in the WORLD is happening to oil?”
“I’m really intrigued but can’t be bothered to sit down and watch an hour’s worth of current affairs”

Do any of the above sound like you?

If so, then fear not inquisitive warrior, for I shall explain this economic crisis in the most concise and simplest of terms. After the next 15 minutes (or less, depending on your reading speed), I hope you’ll have a better understanding of what on earth happened to the price of oil.

  • Iran Sanctions

Unless you’ve been living in a cave for the better part of 2015, you’d know that Iran’s sanctions have been lifted.

“Okay, so what Sully?”

Well, Iran is home to the second largest oil reserve in the Middle East (Fourth largest in the world). This means that there are now 3 million extra barrels of oil per day in the market, forecasted to possibly grow to almost 4 million barrels per day by January 2017.

  • Shale Oil

It’s pretty well known by now that the US has a significant interest in the oil market, and it has maintained this interest for the last couple of decades or so, as shown by various shale oil companies emerging and starting to produce “Shale Oil”(A substitute for crude oil extracted from sedimentary rocks)

If you know a little bit of economics, you’ll know that if the price of a substitute good for a product goes down, the price of that particular product goes down as well.

For example, let’s say hypothetically, if you have Car A which is very unique, very important, and has little to no mainstream substitutes. It sells for a high price for a very long time.
Then, along comes Car B with the exact same features, but only cheaper. Logically, all the consumers flock to Car B as it does the exact same job for a lower price.

Car A is Crude oil in this scenario, while Car B is representative of Shale Oil. (Both are known as substitute goods)

Now, if you know even a bit of Econ 101, you’ll know that if the price of a good goes down, the price of its substitute also inevitably goes down, as the latter starts losing sales to its now lower priced substitute.

This is exactly what has happened with Crude Oil. As Shale came in with a cheaper substitute for Crude Oil, the world’s largest Oil consumer, the United States, recorded trends of people switching from traditional crude oil to home-grown shale oil. This inevitably led to a fall in the price of crude oil.

  • Little to no increase in demand

With Shale Oil and Iran’s Crude oil entering the market, the demand of the oil market is still, more or less, the same. People aren’t suddenly demanding millions and millions of extra oil barrels in their daily lives. That type of change would take years, perhaps even decades. So, once again, basic economics tells us that when supply increases in a market with stagnating demand, the price plummets. (Displayed below)

S-increase

Even China, the world’s second largest oil consumer, is curbing its demand of oil as it predicts it’s economic growth to start diminishing. Moreover, tighter restrictions by the Chinese government on oil consumption will further reduce oil demand, as the government looks to reducing the infamously bad air pollution of China.

My two cents

There are still a million barrels of oil being produced in excess per day, and the number is forecasted to further increase this year. It seems if the current trend continues, the oil market will drown in oversupply and we could see the price falling to $20 or less.

However, a lot of countries depend on oil for their economies, so I am certain that the governments economists will contrive a policy to alter this plummeting price.

And there you have it, you now know more than before about why the oil price acted like it did. And if you already knew all of this, pat yourself on the back for me!

 

 

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The Fallen – Lest we Forget

7th January 2014

Hangu District, Pakistan

A 17 year old had just been reprimanded for tardiness and denied entry to class. As Aitzaz Hasan waited outside his school with a couple of other tardy kids, he saw a strange man approaching them. The man asked, in an unfamiliar dialect, about the location of the local school.

There are different accounts about what happened next.

Some say Aitzaz approached the stranger cautiously, and upon seeing a detonator in his heavyset jacket, quickly alerted his peers to run and inform authorities. Others say the man got spooked and tried to make a run for the school before Aitzaz even got to him

But all accounts agree on what happened next.

Aitzaz ran after the Suicide Bomber, fearlessly taking him down. The struggle resulted in an explosion engulfing both of them, and Aitzaz sacrificed his own life in the process.

He selflessly traded his own life for the lives of thousands. Not a single innocent soul harmed except his own.

Later on,  during an interview, his father emotionally says,

“My son made his mother cry but saved thousands of mothers from crying for their children.”

Truer words have never been spoken. Not only did he save thousands of lives directly, he saved the thousands of family members who would have been mentally obliterated had their child or sibling died that day.

The epitome of a real life hero: Aitzaz Hasan

He deservedly received the “Sitara-e-Shujaat” (Star of Bravery), the highest honor a civilian can receive. As the Chief of the Army Staff, General Raheel Sharif said, “ He is a national hero, who has sacrificed his today for our tomorrow.”

He ignited a bright fire within the nation, a flame that said the country would not back down against these extremists who seem hell bent on targeting and killing more Muslims than any other group

The reason I write this is to remind us all about the past and how we cannot allow it to be forgotten. After all, if the past is forgotten, it inevitably ends up repeating itself. We self-centered people are not deserving of a gallant soul like Aitzaz. But we can correct ourselves. We need to ensure that Pakistan does not need another Aitzaz to extinguish would-be disasters. We need to learn, and learn quickly for time is a great teacher but it will eventually kill all its students.

aitzaz

“Many that live deserve death. And some that die deserve life.”

Overlooked #3 – The Visionary Colonel

A couple of months back, when I had to go to Pakistan for my mother’s operation, I visited a Dialysis Center associated with the Pakistan Kidney Patient association. This center is specifically run for the homeless and less fortunate, in other words those who cannot afford the even the most basic of healthcare. My father and I have been in contact with the retired colonel who runs the center – A brilliant man by the name of Yunus – for almost two years now. In that time we have been fundraising to our family friends, school friends and acquaintances here in Dubai, and I was ecstatic to have finally gotten the chance to visit the facility first hand.

Speaking to the Mr. Yunus, he talked to me about his facility and the financial restraints he goes through on a regular basis. Since philanthropy has always appealed to me, such a project only fueled my interest further and I asked the kind sir if he could break down some of the costs involved in running such a facility. The Colonel happily obliged. Below are his answers to my questions compiled into a convenient narrative. Naturally, Paraphrasing is involved and the amounts have been converted to US Dollars since it is internationally recognized (Keep in mind the different parities though).

“I started this facility 14 years ago, with only 40,000 PKR (≈ 380 USD) in my pocket. I had no access to clean water, no staff, no beds or any medical equipment of sorts. Today, after laboring through the years of hard work, I finally have a facility that has developed fantastically over the years and does its job quite competently.

We have fixed a mini water filtration plant inside the facility (getting access to clean water is becoming easier in Islamabad but wasn’t always so in the past) through which water is purified in a 9-step process.However, this wasn’t a cheap endeavor, and the medical equipment added to the arduous financial strain. Currently, we have 28 beds in the facility and each one has its own dialysis machine.
Each machine cost us about 1.2 million PKR (≈ 11500 USD) and whenever a spare part needs replacing, you can estimate an additional 100,000 PKR (≈ 950 USD). To add to this, I am certain you know about the volatile load shedding situation here, so buying a generator was another (pricey) no brainer. We bought a really powerful one for 2.6 million PKR (≈ 24700 USD) and that is WITHOUT the fuel expenses
*Chuckles politely*. But, it was a necessary purchase and it’s worked out efficiently for us so far, so I am happy with it.

Naturally, we have employed full time doctors and the appropriate staff, but we have 11 full-time personnel as well who volunteer their time free of charge, for which I shall be eternally grateful. You see, we charge each patient 11 PKR (≈ 0.10 USD) per dialysis and 26 PKR (≈ 0.24 USD) for each blood test. Since these costs are so low, we almost always have a waiting list for patients and even have a makeshift GP downstairs to treat those who come in with problems unrelated to kidney failure.

Since we charge so little, our primary source of income is fundraising. We have absolutely no government support and the treatment bills barely make a dent into the overheads. Thus, due to the exchange rates, I urge all the overseas residents I meet to donate, even if just a little. For example, my nephew in Australia collaborates with his friends and each of them send 10 AUD each month (≈ 750 PKR), just like you”

The reason I decided to share this information with you guys because I felt that more often than not this type of work gets overlooked.
We NEED more appreciation for magnanimous efforts in today’s society.

If someone stops by, all they see is a building. What they miss is the blood and sweat cemented into the walls, telling a story of how one individual vision can change countless lives.

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No safe passage for Hungary Refugees

Picture This:

You sell your house, your car, and All Your possessions. You get on a tiny little boat, Risk your life while traversing the unforgiving sea, and cross into Europe, all for a better life for you and your kids. You’re making good progress, thinking you’re journey to a safe haven is finally making decent progress, and when you’re almost at the penultimate stop (Hungary) the Border Patrol says “Sorry, nope”.

Okay they didn’t exactly say that but you get the picture.

A lot of the refugees have no choice but to take this treatment on the chin, as armed men, water cannons and tear gas separate them and their destination. Thus, the actions of some of the younger refugees are quite understandable, as they resort to throwing stones and bits and pieces. Being told to go back* would have built up some dissatisfaction to say the least.

Brand them as Criminals?

The Hungarian PM, Viktor Orban, had the audacity to call these Refugees “Criminals”. However, in a different setting (Say, a football derby), it could very well be easily be classified as teenage hormones and that would be the last of that.

I mean if you’re going to put up inhuman and cold-blooded measures to protect the supposed “sanctity” of your nation, the very least you could do is be straight forward to the press.

The Hungarian PM

Mr. Orban, who has always favored communism and stood firmly against liberalism, has been denounced by fellow EU leaders before this and been compared with Bashar Al Assad, which is an insult to say the least.

His stance on the refugee crisis with this strict migrant policy against a Muslim majority refugee populous, has helped him regain a favorable reputation with his voters.

Somebody please explain to Mister Orban that IOM (International Organization for Migration) laws are clearly being violated. But I wonder who can, or rather will, school him?

Side Note:

A few days ago, Al Aqsa (A holy site for Muslims) was entrenched in bullets and violence. It seems like anarchy and chaos are around every corner. One must ponder, what is happening to this world?

*Back to Serbia in most cases, as this is the route most of them have traveled through.

Sorry Sir, Kinder eggs are illegal. But here, have a Gun.

Sounds ridiculous doesn’t it? Well like it or not, it’s true. Granted you’re not likely to find chocolate and ammunition in the same store, but I’m sure you get the gist of where I’m coming from.

Safety Concern

Look:

I understand there is an urge in people to buy guns for protection. But I think looking at this video will definitely alter your perspective if you come from a pro-guns school of thought.

Currently, approximately 320 million people reside in the US. 66.2% are within the age group of 15-64.  Theoretically, that’s about 212 million people given legal access to firearms (within 3 years for those under 18). I think it’s a logical assumption that not all 212,000,000 will have the right mental approach needed while handling these potential life-enders.

The UK

There is a rational reasoning behind the fact that guns are outlawed in the United Kingdom. Even law enforcement is not issued firearms.
If we look back at the States, One could logically assume that there is a positive correlation between the easiness with which one can acquire firearms and the highest crime rate in the world. Additionally, laws aren’t exactly making it harder for gun owners. In fact, they’re doing anything but that.

Every now and then we hear of a kid who shot up his peers in his school or University. Don’t get me wrong, I’m not saying it’s purely because of open access and exposure to arms. Negligence and improper definitely plays a big part But If access to guns was restricted to law enforcement and Military, would we not save more lives in the process?

READ: Five States allow students to carry concealed guns on college campuses.

Now:

Hypothetically speaking, lets say you’ve had a little too much to drink and have a fully loaded 9mm in your bag for “protection”. You might disagree, but I feel that is a recipe brewing for disaster.
In Missouri, it is no longer a crime to USE a gun while intoxicated, as long as it is in self-defense. Some of you may think that’s fine but Pardon me when I say I’m going to absolutely question the judgement of a man/woman who can’t even walk in a straight line.

On the other hand, Why are Kinder Eggs illegal?

According to the constitution of the United States, Any type of edible that has a toy (or item) inside which is not visible, is banned.

Though I think we can all agree, it is perfectly safe for children over three to eat a kinder egg. Even if a parent illogically gives it to a minor under 3, the Capsule is too big to be swallowed and really difficult to open for a toddler.

The kinder egg caused 3 fatalities in about 40 years. Guns on the other hand? I don’t think you need to be schooled on that.