Frenzy in the markets as oil heads for $100 a barrel

The bind is about the record high prices of oil and the reasons shadower the price mechanism on the world mart from oil. deuce main reasons are pointed out in the article, namely increase take on for oil and reduction in the supply.

Demand is the list amount of goods and services that consumers indispensability and are willing to secure at any price over a flow rate of time. There are several factors that can influence necessary: price, availability and price of substitutes, expectations of consumers of future price, etc. In this article it is made clear that consumers are driven to pervert more(prenominal) oil at the lower prices- ?coming in to buy into dips?. Their expectations are that the price of oil will rise so far further and they want to have enough stock e.g. factories, dealers forward price rises. The expectation of dealers on their US market that the hebdomadary figures for the oil reserve in the US ? on Wednesday would assign a sharp drop? is that D curve shifts to the remedy which increases the price of oil on the US market. Graph??On this graph we can see the initially price was at level ?? and quantity demanded was ?.. The consumers? expectations of higher prices shifted the D curve to the adept and this increased the price to the level of ?.., and increased quantity demanded to ?..

another(prenominal) factor that influences the price of oil on the US market is the ?sense that supplies are tight in a agricultural which consumes a quarter of the world?s oil?. confer is ??This sense of future reduced supply comes from the Us heftiness Information Administration revising ? its projection for US gravelly stocks? at lower levels, while projecting a demand for oil for the fourth quarter that will increase with...

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