The Estimate Price Crude Oil Will Correct To On An Even Globe
The estimate price crude oil will correct to in the free market if cost of living were even across the globe
Oil consumption by income group Rough estimate
High income countries 43 percent Medium income countries 26 percent. Middle income- 13 percent Low income countries- 18 percent
If the cost of living were equalized, the high income countries will drag down price to less than five percent of the current price but their weighted average is less than fifty percent
The middle income countries like China will drag down the price to around ten percent of the current price and their weighted average is around 26 percent
The middle income will drag it down 30 percent and weighted average is 13 percent
Low income will leave it at around 100 percent and weighted average is 18 percent
If countries are 100 in number and oil price is 50 dollars then new price will be something around
43(60)0.05 + 26(60)0.1 +13(60)0.3+18(60)1 divided by 100
(129+156+234+1080) Divided by 100
1599 divided by 100=15.99
Estimate New crude price that the market may correct to if cost of living across the globe became equal is USD 15.99
Possible deviations
High income countries can nominally reduce in GDP to up to two percent of current size if all countries aim at less than USD 2000 per annum in per capita income which will mean that the calculation or estimate above will be wrong. If a per capita income of 50k dollar per annum is forced down to 2k dollars that will be a 96 percent reduction and the final crude price will be lower than my estimate in that scenario
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