Why oil’s 42% spike could soon backfire
The article discusses the reasons for huge surplus that have resulted in collapsing oil prices in the oil market. Analyse Oil market with the nature of ‘Oil ‘as an essential input for production from the Demand Side and presence of few large global producers like Saudi Arabia, Kuwait, and Russia from the Supply Side.
Topics include Supply and Demand Determinants of Price , Price elasticity of demand . Include diagrams of oil market with surpluses and the continuing downward pressure on market price to clear the glut in the market.
Evaluation will cover analysis of the measures to clear the surpluses by stopping or reducing the production and expectations of increase in demand with fading recession fears, which will eventually bring in price stability. Include impact on the global oil Producers, Consumers and Government because of falling revenues; costs of production, general decrease in prices of other goods & services in short term and long term.