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Worksheetssupply and demand and oil
Total questions: 15
Worksheet time: 8mins
oil prices fluctuate due to
the market forces of supply and demand
the amount off oil in the Middle East
the big companies trying to maximise profits
the market for oil is complicated because
its International and OPEC controls the entire market process
it is made up of many markets - crude oil, petrol and petrol by products
there is no single price for oil or its many by products so consumers can be ripped off
crude oil production is dominated by
OPEC russia and USA
OPEC and Europe
every country has enough oil for their own development except Japan
Petrol is the most important use of crude oil in most countries because it is used for
raising the revenue and GDP
expanding trade markets and nw exploration
transportation heating and electricity generation
Petrol has inelastic demand because
Australia is a nation with a love of private cars , personal freedom and the love of driving great distances
petrol is a necessity, used often and a small percentage of income
the amount of oil is limited and demand determines who gets it - like the wealthier economies
one of the major demand factors driving up the price of petrol has been
Opec's decision to change the oil quota
the numbers of cars on the road
the strong economic growth of major economies like China and India
which if the following would NOT increase the demand for petrol
bigger SUV;'s become more popular
improved access to better free public transport
access to better roads and freeways, and parking stations
Global supply and price of oil is determined by
each individual country sets their own prices - its very cheap in the US compared to Europe
the world bank sets oil prices to allow all countries access to such a valuable resource
OPEC who control most of the oil reserves and collude to determine what amount is supplied
Opec is able to increase its revenue because
a decrease of supply with elastic world demand means they are able to sell more
they can decide who gets it by how willing they are to pay - like US will pay more because demand is inelastic
a decrease in supply with inelastic demand causes countries to pay more and despite the price increase buy nearly as much
which is NOT a supply shock
Oil tankers and oil wells blown up in a war
new discoveries of oil offshore in oil
new discoveries off major untapped oil in the Great Barrier Reef
the petrol retail market in Adelaide is basically an oligopoly because
they sell petrol which is a homogenous product and they all share the same price to maximise profits
there are four main retailers OTR X convenience shell and Ampol who have high barriers to entry and some degree of brand loyalty
with so many different petrol stations all fixing the same price they are able to make supernormal profits
historically prices have peaked during
Friday Saturdays and public holidays
randomly to catch consumers off , so they dont know when to get cheap petrol
mid week
however when examine the actual price cycles it now seems - there may be more than one answer
there is no standard cheap price period and the discounts happen randomly - although Friday stilll seems the main day to look for cheaper petrol
once a firm cuts prices the other firms all seems to follow to that price and when the discounting ends they return to a price around 1.40
the biggest discount cycle was 45 c a litre but it is usually about only about 15'c a lite
the length of the discount cycle is now random , falls slowly over time and can be very short before rising sharply
good answers refer specifically to the evidence not just opinion based
which is a not a demand factor ( causes shifts ) in influencing the price of petrol
the price of EV's
the price of public transport
the price of petrol
the availability of care sharing and using bikes
which is NOT a supply shock ( shift supply )
cars become less popular
taxes on petrol
external impact of war in Middle East
supertankers cant reach Australia
