link here to article
This article, and the comments that follow, provide good insight into the rapid rise in oil prices. Demand for oil is not sensitive to price in the short term and supply in inelastic in the short term as well. Therefore, small changes in supply can cause wide swings in the price of oil short term. The Saudi's have played the role of responding to supply shocks elsewhere in the world by altering production. The question is whether they can raise production to compensate for a supply shock from Libya or elsewhere.
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