Question

World oil supplies have experienced unplanned reductions as a result of the current pandemic, leading to unplanned lay-offs. Concurrently, world demand for crude oil is down because in most countries, workers and non-workers were locked down, and people did not move their vehicles for weeks. Airlines have grounded their planes, and many other oil consumers shut down operations. Using your knowledge of demand and supply so far, comment on the likely effects of these on crude oil prices, and speculate on how close or further away from normal we should expect the world crude oil prices to be in December 2020

Answer 1

Answer:
As clearly explained in the question that the global demand of crude oil has been decreased due to COVID-19 pendamic, so based on demand supply hypothesis, we have more supply in the global economy then demand world wide, so the price of crude oil will further decrease to the point where it will achieve a new equilibrium where demand and supply will be equal.

Regarding crude oil prices during December 2020, it mainly depends on the extent and severity of the pendamic till that point, if pendamic increases further than the current situation in this case demand will further decrease, though the decrease of demand from here is very less which can further decrease the crude oil prices.
On the other hand this pendamic is taken care off by that time and economy starts working normally in this case demand will shoot up and so does crude oil prices to maintain the equilibrium between demand and supply.