Supply and Demand

[fokhrul88]

Can anyone explain to me why demand and supply analysis cannot always explain events in the oil market? Any help is appreciated.

[HaizeyDays]

Unfortunately, the laws of supply and demand do not wholly apply in the Oil market as a significant amount of oil production is controlled by the cartel OPEC.
This cartel decides amongst itself how much oil it is going to produce. That, coupled with the fact that demand for oil derivatives (petrol, kerosene, etc) are relatively price inelastic (you are going to fill the tank of your car regardless of whther it costs �40 or �50) means that the regular, simplistic, laws of supply and demand cannot apply fully in this case.

I hope this helps.

KHT

[steven15]

You are right HaizeyDays.
Also, oil price is measured in dollars and price of the pound to the USD has fallen.
This is a major reason why the Fuel Prices Are Going Down Internationally,but The Benefit Is Not Being Shared By The Consumers.

[tsumanshr05]

Well, I can help you provide the link from where you can get all the useful information and answers about these financial aspects (including demand and supply). Well, you can visit the link http://www.globalfinanceschool.com/interactive-courses/demand-and-supply
I hope here you will find the answer for your question. Global Finance School offers the world’s easiest way to learn finance, with numerous e-books and interactive courses designed for beginners in six languages. I hope you will find my answer helpful.