Demand And Supply Of Oil Essay

844 words - 3 pages

Microeconomic (Project 1) Jamal Nasser Ba-Dhafari
Report Title: - Demand and Supply of OilStudent Name: - Jamal Nasser Ba-DhafariID Number: - 970002058Programme: - Engineering Management Bachelor of Applied Science(International and UAE Economics EMGT 410)College Teacher: - Mr. Nihad HamidDate: - 14/12/2002Table of Contents PageIntroduction 3Demand of Oil 3Supply of Oil 5Supply and Demand Equilibrium for Oil 6Conclusions 6References 7IntroductionOil 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 OilDemand 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.The graph bellow shows the price of Oil Verses the Demand of Oil by consumers.The effect of increase in demand (excess of demand) for Oil causes the curve to shift inward and leading to an increase in Oil prices. On the other hand Suppliers always tries to follow the demand curve by increasing their supply of Oil to keep the prices of Oil stable.Supply of OilFaced with such an inelastic demand within a certain affordable bad of prices, Oil producers could always increase their revenues if they offer fewer units for sale. So supply restriction is then a method by which Oil producers could increase their revenues. And they try to maximize their Oil revenue without interrupting the demand of Oil by the consumers. They try to keep price level under which new Oil development...

Find Another Essay On Demand and Supply of Oil

Supply and Demand of Rental Apartments Simulation

800 words - 3 pages This paper examines the economic factor at work in supply and demand of rental apartments in the city of Atlantis. Acting as the property manager for GoodLife Management in Atlantis, the simulation asks the user to make pricing and supply decisions based on changes in the market. Changes in price, population, average salaries, tastes, and government regulations all affect the market in a number of ways.Decisions affected by Changes in Supply and

Supply and Demand Essay

1688 words - 7 pages Using demand and supply analysis determine the impact of another event of the scale of that which occurred in the USA on September 11th on the market for hot peppers and crude oil from Trinidad and Tobago.Demand Definition: The entire relationship between the quantity of a commodity that buyers wish to purchase per period of time and the price of that commodity, other things being equal .The quantity demanded of any commodity n (Qdn) is given by

Supply and Demand

2247 words - 9 pages ChangesIf we analyzed then we come to know that supply and demand allows customers and producers to modify the market situation quickly. Supply is prejudiced by the aptitude to receive, refine and deal out enough oil to stations countrywide. When there is a change in provide, the price of the petrol must increase. Demand in turn is prejudiced by the cost of goods. If the cost of a product is elevated it is less probable for a customer to acquire

Supply and Demand - Microeconomics

950 words - 4 pages lives and their every day habits, the demand of gasoline has increased. The United States' inability and/or refusal to refine oil within the country created a demand for the outsourcing from those countries which have ample supply. According to the U.S. Energy Information Administration (EIA), gasoline prices in the U.S. in June 2006 averaged $2.93 per U.S. gallon, compared with just over $2.33 per gallon in June 2005. (http://eia.doe.gov) The

Supply And Demand

1889 words - 8 pages Laws of Supply and Demand The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What

Supply and Demand Assignment

507 words - 2 pages Supply and Demand Assignment• Visit http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm and read the material posted about supply and demand. Explore the concepts of supply and demand by using the interactive features on the graphs. Use the questions following the diagrams to guide your exploration. Visit parts 1, 2, & 3 of the Web site.• Fill in the matrix and answer the questions in Appendix C. Describe

Applying Supply and Demand

712 words - 3 pages ���� Applying Supply and Demand Concepts Simulation Welcome to Atlantis The Supply and Demand simulation involves acting as Property Manager for GoodLife Management, a property management firm that manages apartment complexes in Atlantis. This simulation was an exercise in applying the supply and demand concepts based on current market trends. The property manager is required to adjust the monthly rental rate of two

Supply and Demand Simulator

1089 words - 4 pages at this microeconomic viewpoint is the effect of an unfavorable buyers economy has on the need for the residential homes. The increasingly number of families with financial means desiring to purchase homes sparks the increase in demand, while the supply of homes remains constant. This concept exemplifies the microeconomic model because microeconomics exists solely on supply and demand of corporations or individual purchasers. The adverse buyers

Supply and Demand Simulation

945 words - 4 pages The purpose of the simulation is to familiarize a user with the demand curve, supply curve, equilibrium, and price ceiling. As a property manager for GoodLife Management in Atlantis, the responsibility for maintaining reasonable rental rates and quantity of apartments demanded involves several factors. Personal preferences, economy, income, and rental rates all affect the vacancy and occupancy ratios. Decisions regarding supply, demand, and

Supply and Demand Simulation

1205 words - 5 pages Supply and Demand Simulation Supply and demand plays an intricate role in the amount, price, and availability of products and services. The applying supply and demand concepts simulation guides users through making decisions for Goodlife, a management company for 2 bedroom apartments in Atlantis. The simulation names the user the property manager; responsible for vacation residents, new pricing for units, and advertising. The property manager

Supply And Demand Simulation

1271 words - 6 pages Supply and Demand Simulation PAGE \* MERGEFORMAT 1 Supply and Demand SimulationUniversity of PhoenixECO/365: Principles of MicroeconomicsOctober 26, 2009Supply and Demand SimulationIn the University of Phoenix simulation (2003), Applying Supply and Demand Concepts, a situation is presented concerning the supply and demand of two-bedroom rental apartments in Atlantis. Throughout the simulation scenarios are presented and choices must be made

Similar Essays

Elasticity Of Demand And Supply Essay

1718 words - 7 pages chips and oil. If the price of oil increased, chips demand will decrease. The following figures shows the relation between product X and Y. These two goods are considered to be complements. When product Y’s price increased from P1 to P2, product X’s demand decreased from Q1 to Q2. Organisations can increase their profit by producing own unique complements. Cross demand elasticity can be calculated through (% change in quantity demanded of good

Law Of Supply And Demand Essay

2017 words - 8 pages IntroductionIn this paper we are going to examine four different scenarios that demonstrate the laws of supply and demand in our economy. The first section is going to describe the effect of income increases on the computer market. In the second section, we are going to examine the effects that major construction to the tunnels surrounding Manhattan have on the Manhattan apartment market. In the third section, we will look at the elasticity of

The Concepts Of Supply And Demand

1365 words - 5 pages supply considerations. In the short term there are no "quick fix" solutions. Congress, the Administration and the motoring public need to continue to rely on the free market system to determine the appropriate supply/demand balance.References:Bonsor, K. (2004a). Control of the oil market. Retrieved on January 8, 2005 on the World Wide Web: http://money.howstuffworks.com/gas-price3.htmBonsor, K. (2004b). Where your money goes. Retrieved on January

Causes Of Changes In Supply And Demand

588 words - 2 pages Introduction* *A basic economic concept plays a vital part in prices of goods. The prices are set in a market that is supported by the laws of supply and demand. Supply and demand factors determined the wants and desires of people or a group. Supply is the product or service a producer has uncommitted and capable to legal transfer by selling . Demand is the amount of the product or service that buyers want to buy .This means that every