Re:Oil Prices Jump Most on Record After Saudi Strike
by bryanlarsen on Monday September 16, 2019 @07:58AM
(#20983174)
As long as there is cheap production in the Middle East and elsewhere, a large decrease in the demand for gas due to electric cars or any other reason will result in lower priced gas and thus more disruption during a price spike.
Supply and demand: lower demand, lower prices.
To use a more specific economic law, the price of a commodity is the cost of the marginal unit. Right now there is so much demand that the world uses all the $10 Saudi oil it can, all the Norwegian oil, all the fracked oil, but not all of the Canadian tar sands oil. That costs about $60 per barrel to extract and transport. Thus the current price.
Supply and demand: lower demand, lower prices.
To use a more specific economic law, the price of a commodity is the cost of the marginal unit. Right now there is so much demand that the world uses all the $10 Saudi oil it can, all the Norwegian oil, all the fracked oil, but not all of the Canadian tar sands oil. That costs about $60 per barrel to extract and transport. Thus the current price.