Question

Net U.S. energy imports have decreased every year since 2016. Last year’s change in net energy trade

(crude oil, natural gas, coal, and petroleum products) in the U.S.—from 3.6 quads of net imports in 2018 to

0.8 quads of net exports in 2019—was the largest change in U.S. energy trade since 1980. How would the

low oil price affect the U.S. crude oil trade (import and export) in 2020? Apply the D-S model.

Answer 1

As countries stay shut, their interest for oil and oil based commodities will fall quickly. Accordingly, various countries will have the option to substitute oil imports with neighborhood creation however much as could reasonably be expected to hold monetary shortfalls within proper limits.

In the event that we see the worldwide costs of oil, we understand that they have just hit untouched lows. The explanation behind this is straightforward, as individuals start requesting lesser, it turns out to be less beneficial for entrepreneurs which at that point must choose the option to lessen yield just as costs of the item.

In 2020, the worldwide enthusiaxsm of oil has gone down. Moreover, the expenses have tumbled to a degree where it doesn't look good for US to convey oil at such a critical cost. Along these lines, in 2020 it is difficult for US to improve their admissions, while imports will be there.

Here we can clearly see that the initial prices of oil gets reduced and revised over time. The same now becomes decreased price.

Further, the Initial Quantity also becomes Revised Quantity and decreases, the Demand for Oil can clearly be seen declining from Demand Curve 1 to Demand Curve 2 and the supply shift can also be seen.