Demand and Supply
Introduction The paper aims to answer four questions quoted here pertaining to demand and supply of oil and how it is driving the oil prices.
Question 1: How do changes in supply and demand affect oil prices?
Answer: Changes in supply and demand of oil significantly affect oil prices around the world, which is discussed in this section.
Effect of Demand on Oil Prices:
Oil demand is directly correlated with its price, other things remaining constant. The recent trend is such that increase in world over oil demand is putting upward pressure on its price. Globalisation, trade liberalisation and economic growth have resulted in higher oil demand. To a great extent, this growth is being support by ...