0
Basic principal of "supply and demand".
The less there is of something the more scarce and expensive it becomes.
The more there is of something the cheaper the price as it becomes very a very competitive product (normally with a low margin).
In the case of oil, if there is less oil available in the market the higher the price per barrel. The more freely available (or if oil is in surplus), the cheaper the price.
If OPEC and non-OPEC countries cap their oil production to a level that is below what the international demand is, this creates a deficit in supply, and cause the price to go up.
If there is a surplus of oil among suppliers and they all clamor to sell it, this in effect creates a glut and drives the price down.
Wiki User
∙ 8y ago
Add your answer:
Earn +20 pts
How would local and world economiesmarkets be affected by the change in oil supply and prices?
if oil prices go up, then so does everything else
International oil prices are determind by?
Oil prices everywhere are determined by supply and demand through a market exchange like the NYMEX. It is done similar to how stock prices are done. When the supply is high relative to demand, people bid lower for a barrel of oil, when the demand is high relative to supply people bid higher for a barrel of oil. Speculators can also play in this game bidding up the cost of a barrel of oil. Interestingly enough, far too many people blame the oil companies when prices are high. While this can be partially true, since oil companies can withhold supply from the market, it generally does not hold true because there are many many different places where oil can be retreived. The supply of oil to the market can also be determined by the price. Oil companies will only supply so much oil at a given price before they will not supply any more unless the price is bid higher. Where the bid price equals what the oil companies are willing to supply you have an equilibrum price.
Why do high oil prices affect food prices?
transportation of food takes oil to get it around to your local grocery store therefore driving up food prices.
How does dependency on oil affect gas prices?
Since there is a constant need for oil the people who sell the oil may raise the price on Oil to make profit in result it rases gas prices.
What method does 'OPEC' use to raise the price of oil?
OPEC uses supply and demand to determine prices. If they want to raise the price, they slow down production. The lower supply will equal higher prices.
What are societal changes that affect the family?
prices rise gas goes up oil rises in price
What are things that affect oil prices in 1945?
no
What are three things that affect oil prices in 1945?
no
How would local and world economiesmarkets be affected by the change in oil supply and prices?
if oil prices go up, then so does everything else
How did the oil supply affect the design of American cars?
I think that the oil is spoil.
Why do high oil prices affect food prices?
transportation of food takes oil to get it around to your local grocery store therefore driving up food prices.
International oil prices are determind by?
Oil prices everywhere are determined by supply and demand through a market exchange like the NYMEX. It is done similar to how stock prices are done. When the supply is high relative to demand, people bid lower for a barrel of oil, when the demand is high relative to supply people bid higher for a barrel of oil. Speculators can also play in this game bidding up the cost of a barrel of oil. Interestingly enough, far too many people blame the oil companies when prices are high. While this can be partially true, since oil companies can withhold supply from the market, it generally does not hold true because there are many many different places where oil can be retreived. The supply of oil to the market can also be determined by the price. Oil companies will only supply so much oil at a given price before they will not supply any more unless the price is bid higher. Where the bid price equals what the oil companies are willing to supply you have an equilibrum price.
Why do heating oil prices change so frequently?
Oil prices change frequently for a number of different reasons. Crude oil is a big part of this, and will affect the price of oil. Demand can be different depending on the weather and economy. Seasons can also affect the demand for oil.
How does dependency on oil affect gas prices?
Since there is a constant need for oil the people who sell the oil may raise the price on Oil to make profit in result it rases gas prices.
What method does 'OPEC' use to raise the price of oil?
OPEC uses supply and demand to determine prices. If they want to raise the price, they slow down production. The lower supply will equal higher prices.
Does Sam's club do oil changes?
Yes, Sam's Club offers their members oil changes. An oil change can range in prices from $18 to $20 depending on your location and the severity of an oil change needed.
How did rising oil prices affect nations around the world?
It made buying oil more difficult
