Demand, Supply, and Equilibrium Price of Oil (Essay Sample)

Demand, Supply, and Equilibrium Price of Oil
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Abstract
This assignment examines two articles addressing demand, supply and the equilibrium price of oil. Demand changes with the variation in the equilibrium price of crude oil and its products such as petroleum, diesel, gasoline, and other oil energy products. The first article by the U.S Energy Information Administration explains the determinants of crude oil prices: demand and supply. Change in demand and supply for this product is driven by a country’s economic growth. High economic growth leads to increased production activities. This increases demand for oil and the equilibrium oil price rise. The second article discusses three main factors influencing change in oil prices. These are Demand, Supply, and Traders. Traders look at current supply, future supply, demand to determine oil prices. Currently supply relates to the quantity oil availed in the market. Increased supply will flood the market with oil, lowering demand and oil prices. Future oil supply is determined by oil reserves. The reserves are used to lower higher oil prices when supply is low and price is high.
Demand, Supply, and Equilibrium Price of Oil
Demand is the quantity of goods and services consumers are willing and can pay for a certain price and time. Market demand presents demand for particular products and individual consumers ready to buy them. It is determined by how willing they are to spend a certain price on a particular good or service. The higher the demand the higher the increase in price, and vice versa. Supply is the amount of goods and services available for consumers (Hofmeyr, J.-H.S & Cornish-Bowden, 2016). In this assignment I will address articles that discuss demand, supply, and equilibrium price of crude oil. Change in demand