Demand and Supply of Oil
Introduction
Oil is one of the most valuable and scarce energy resources in the earth, and in order to assess the recent developments in the price of Oil in world trade, it is important to analyze the underlying forces of demand and supply. As energy is an important vehicle of production and growth, Oil is still its main source and has no competing substitute to replace it altogether in the foreseeable future. The UAE is one of the biggest suppliers of the Oil in the world, and as a member of OPEC price and supply of Oil is controlled by the 10 members of the OPEC and Non-OPEC countries.
Yr Oil Price Tq Oil Demand Tq Oil Supplied OPEC Supplied OPEC Share
00 24 76,000,000 76,900,000 25,400,000 33%
1Q 27 76,300,000 76,300,000 26,200,000 34%
2Q 29 75,300,000 75,400,000 26,700,000 35%
3Q 24.5 76,500,000 76,500,000 25,201,000 33%
4Q 25 77,600,000 76,900,000 24,201,000 31%
01 21 76,400,000 76,300,000 23,201,000 30%
Demand of Oil
Demand for Oil is a derive demand according to its many diverse uses. Oil can be used to satisfy the needs of Mankind . Oil is used as the main source of energy and as the major input in all petrochemical industries, which could provide us with our needs. Demand for Oil within a certain band of process and within a certain time interval is inelastic. This means that if there is a relative increase in its price within a certain affordable band, the relative change in the quantity demanded for Oil will turn out to be less than the relative change in its prices. So quantity demanded for Oil related to its price. Consumers are rational decision makers, therefore if price of Oil is acceptable they decide to buy more to maximize their benefits and vise versa.
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