Supply and Demand Writing Assignment

Supply and Demand
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Supply and Demand
The December 4th, 2018 article titled Oil Prices Perk Up on Trade Truce, Possible OPEC Decision by the Associated Press focuses on the price of oil and the influence of supply and demand on the same. The article starts by noting that there have been talks to reduce the supply of oil by the major oil producers. Analysts claim that oil-producing nations have sought to cut the supply of oil by more than 1 million barrels. This move is mainly so that the prices of oil could go up. The price of crude oil has been on a downward trajectory since October, and this can be attributed to the oversupply of oil as well as fears of a decrease in oil demand as the global economy struggles. However, the article notes that certain changes were experienced as oil prices rose. But this was not an act of the markets or supply and demand but came as a result of the trade dispute between the U.S. and China. The politics of oil run deep, and in this particular instance, they are indeed at play especially when one considers the actions of these two countries. Regardless of the what has been happening between the U.S. and China, it is affirmative that there has been an oversupply of oil and it is time that this is dealt with or else prices will continue to plummet. It should be noted though that while oil-producing nations might be willing to reduce their supply, the matter remains complicated as some major players like the U.S. appear to be in favor of lower prices especially when the sentiments of President Trump are taken into account. Even though the U.S. oil producers have greatly benefitted from the high prices of oil to the point where the U.S. is now considered as the world’s largest oil producer, the nation’s leadership seems committed to lowering oil prices. However, as the article seems to indicate, America’s leadership appears wary of extremely low prices which might harm the oil industry and hasten its downfall.
The article does present some interesting facts. It is always crucial to balance the supply and demand of a commodity to avoid instances of oversupply or low prices in the market. Having seen the price of oil reduce the past few months, oil-producing nations have decided to reduce their prod...