Question

Find and analyze a current article describing a change that is happening in the market for a good or service.

1. Description of the product or service that is experiencing a fluctuation in supply or demand.
2. What is currently changing in the market for the good or service? Is it consumer driven or industry driven?
3. Indicate whether it is an increase or decrease in supply or demand. A shift to the right (more) or a shift to the left (less)?
4. Predict the overall impact this shift will have on the price of the product or service.

Answer 1

1. Oil is a major global component which is used to produce intermediaries and used in the transportation industry by all countries globally. There has been a decline in demand for oil as countries reduced output led by global demand slackening. As oil is used for commercial purpose extensively, and with increasing focus on renewable forms of energy, demand has declined drastically.

2. The demand is industry driven as oil is a major component in the chemical and lubricant industries. plastic, and it is also used to produce electricity. As major countries have closed down borders and the cases of the virus mount up, so does the capacity of output generation decline as industries are not generating as much output as they were before the pandemic hit the countries. As industries are not producing as much output, they are demanding less oil while consumers have also reduced consumption even with a decline in oil prices as their mobility has been restricted due to the pandemic.

3. There is a reduction in demand and the demand has shifted to the left because of greater focus on renewable forms of energy, and pandemic led slowdown in output, enhanced focus on green energy usage and recycling products, along with using green energy sources for transportation.

4. The price of oil with decline because of the overall impact of greater supply and slower demand recovery all over the world as most of the companies expect recovery to take longer.

Source: World Oil: Oil prices fall on mounting demand recovery concerns