Lower Demand Drives Down Price Of Oil(Edited)

767 words - 4 pages

This article is about the falling price of heating oil which raises the oil prices in the market. Through this, we can clearly see that this article divides into two sections, the decrease of the price of heating oil and crude oil.The law of demand is when the price of a good rises, the quantity will fall. The quantity demanded is the amount that consumers are willing and able to purchase at a given price over a given period. There are a few factors that may affect the demand to change for a good or service: expectations of a future price change, the income of the consumer, the number of the consumer, the price of the substitute of the good etc. The income and the number of the consumers are ...view middle of the document...

The second part of this article is about the falling price of crude oil. The supply of crude oil has risen in great amount which caused the price to decrease. This article clearly tells us that "Crude oil led the market up and crude oil will lead the market down," Since there is also government interventions on the oil demand to control the pollution that has been created, which affects and decreases the demand of this good. We can also plot this on a graph according to this article. The crude oil prices had from P1 ($94.63) to P2 ($91.17) because in the increase in the supply. However, because of government intervention, the demand of the oil in the market decreases which causes demand curve to shifts to the left from D1 to D2 while the supply curve stays the same.Oil is an essential good which is required in almost every production of service including transport, production etc. and this resource also has very few substitutes. Most industries are very sensitive to the fluctuations of...

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