Crude oil is considered a non-renewable energy source because it was created when the remains of algae were heated under the pressure of the earth over millions of years. The long-term process makes it very limited to find, as it is not as abundant as other fuel sources. The crude oil market is always in high demand among investors and consumers. Therefore, people are always looking for ways to secure the supply of crude oil, especially in countries that produce and export crude oil. The relationship between crude oil and the underlying economic outlook is very close. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Since a few decades ago, the price of oil has gradually increased. The world economy based on oil supply is never stagnant due to some factors. One of these includes the imbalance between crude oil production and the continuously rapid demand in the market itself. The world is experiencing overpopulation, thus creating a greater demand for basic necessities (food, energy resources, etc.). The growth rate of crude oil production is worryingly slipping downward from time to time. According to Kumhof and Muir (2012), the crisis in the oil economy is due to the negative oil supply shock. Two important assumptions can be drawn from the statement; the trend growth rate of global oil production is small, and a conventional macroeconomic model, with oil entering the economy's production and consumption technologies, is adequate under conditions of increasing oil shortages. To delve deeper into policy, risk analysis and scenario analysis, Global Integrated Monetary and Fiscal Model (GIMF), a multi-regional dynamic general equilibrium model, is used. However, research conducted by Kumhof and Muir (2012) found that under the two assumptions, oil shortages are not a major constraint on global growth. Furthermore, it does not contribute significantly to the tremendous fall in the current imbalance of the oil economy. The increasing elasticity scenario is believed to occur if the price of oil is doubled or tripled relative to the permanent real price. The price increase will actually lead to a smaller gap in effects on growth and the current imbalance in the oil economy, which is contrary to the initial belief that it will destroy the balance in the economy. The price of oil changes from time to time, and who is responsible for this is the Organization of the Petroleum Exporting Countries (OPEC). It is an intergovernmental organization of 15 nations, including major oil-exporting countries. OPEC has a major impact on the price of oil. However, its ability to control the price of oil is rather limited in the long term. This is due to the fact that all countries involved have different incentives than OPEC as a whole. This statement can be further explained through a situation where the price of oil is set by OPEC but does not get satisfaction and acceptance from OPEC countries. Therefore, they have the power to cut the supply of oil to increase the price of oil. However, it is not a smart step because they knew that by reducing the supply they would also have to reduce the revenue. The ideal situation they are trying to achieve is to increase the price of oil while increasing revenue. OPEC can also decide to increase or decrease oil supply, dependingof the approval of the OPEC countries. Ultimately, who controls the price of oil depends solely on the forces of supply and demand themselves. Although OPEC has the authority to control the price, it always does so in the short term and the price will only be affected temporarily. Usually, in common cases, the price set by OPEC is an average of the oil prices of some countries, namely Algeria, Indonesia, Nigeria, Saudi Arabia, Dubai, Venezuela and Mexico. This average price will be constantly monitored by OPEC to study the conditions of the world oil market. However, OPEC oil prices are generally lower than other countries due to the quality of the oil itself. OPEC countries produce oil with a higher sulfur content, which will only lead to a lower quality of the gasoline produced. By setting the lowest price, it will be able to meet the consumer's satisfaction and needs as the price is in line with the quality of the oil. Due to the fluctuations in crude oil prices, it is possible for investors to invest in crude oil futures as it can help you earn or lose significant amounts of money in a short period of time. There are two types of oil contracts that can be purchased by investors; futures contracts and spot contracts. As stated by Fabozzi (2004), futures contract is an agreement between two parties, who are a buyer and a seller, where the buyer agrees to take delivery of something at a specified price at the end of the designated period of time and the seller promises to deliver something at the specified price at the end of the designated time period. In this case, it specifically refers to the buying and selling of a certain number of barrels of oil. Usually, they will liquidate their future holdings before taking delivery. Although there are multiple numbers of futures contracts open at the same time, most trades will only revolve around the closest futures contract, also known as the most active contract. The price of the futures contract depends on the willingness of buyers to pay for the oil on a set delivery date sometime in the future. Since the date is actually in the future rather than the current time, there is no guarantee that the price will reach the target price in the market. Usually, the price shown will only be the price expected and set by the buyer of the oil. Another type of contract is spot contracts. This type of contract differs from futures contracts in that the exchange of financial instruments is settled immediately. The price of the spot contract depends on the current market price of oil. Commodity contracts bought and sold on spot markets take effect immediately, as it is an immediate process. The process involves only the exchange of money, followed by the buyer's acceptance of delivery of the goods. In the case of oil, demand for immediate versus future delivery is small, largely due to the logistics of transporting oil to users. However, investors normally do not take delivery at all, so the spot contract is less popular than the futures contract. Industry 4.0 is defined as the digitalization transformation of production or manufacturing-based industries, driven by connected technologies. Industry 4.0 introduces the so-called “smart factory” in which cyber-physical systems monitor the physical progress of the factory in real time and are able to make decentralized decisions. Other terminology includes Smart Manufacturing. It is a revolution that started in Germany and Malaysia is one of the countries that has adapted the strategy to transform the technology.