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This article is about Chinese oil supply and how China is attempting to overtake the United States in yearly oil productions. It is an example of a supply article, because it speaks of how lower prices directly relate to supply. It also speaks of how both China and India are putting a lot of money into foreign oil resources, hoping for the future. Looking forward, if China continues in its current footsteps, it will be obtaining the most oil in the world, and not only from domestic resources, but mainly foreign ones.

Analysis This article about oil prices and supply in China, relates to what we spoke of in class, because some of the key elements of supply and demand are included. The main issue of the article is Chinas oil supply, along with its demand for oil. China has a generous supply of oil from its own resources, whilst she is still trying to acquire a lot of oil from foreign sources. China is also attempting to up her quantities of oil to beat the United States within the next couple of years, and by 2020, China is to be the country that will be obtaining the largest quantities of oil. The article is related to our class topic of supply, because as China plans to sink its prices for oil, the supply, or quantities should go up with time. This is exactly what was discussed in class and is shown on supply curves or graphs.

Explain what you think is happening to the equilibrium quantity and price and what it means for signalling, incentives, and resource allocation. China has made constant attempts at increasing its oil supplies, which would lead to lower oil prices and economic growth. The equilibrium quantity of oil will increase and therefore the prices will be lowered. A higher supply of oil signals lower prices for both the producers and consumers. China will try to probably keep the price up, and the consumers will look for a substitute, or try to ration the good. Although, if the consumers are willing to buy at the old price, while the suppliers gain in resources, there will be a producer surplus. In other words, the producers, China, will gain more than they could be gaining if the consumers were to adjust their standards.

Since May 2012, the price of crude oil has fallen from $106/barrel to $78/barrel. For the first time in over a decade, the supply of crude oil has exceeded the demand for it, meaning that the price for crude oil is likely to drop even more. The reason for this increased supply has to do with technological advancements which have enhanced the production of crude oil. Some of these technological advancements include the use of long-reach horizontal well bore technology and multi-stage hydraulic fracturing. However, the price of oil cannot drop below the production costs for too long, otherwise, oil firms would go out of business. It is predicted in the article that the price for oil will not drop below $72/barrel, as the production of crude oil is currently at about $60/barrel. From the article, it can be deduced that the massive increase in supply of crude oil is due to technological productivity, which is allowing for far more oil to be supplied.

This article addresses a recent issue which has impacted many US citizens living along the Gulf Coast. It discusses  the impact that Hurricane Isaac has had on the price of oil and gas in the past couple of days. The national oil and gas prices have risen by 5 cents in one day. Areas which were most affected include Ohio, Indiana and Illinois where prices rose by up to 14 cents.  This increase in gas and oil prices can be blamed on the destructive affects of Hurricane Isaac. Isaac has flooded the oil hub located along the Gulf Coast and has shutdown a main pipeline in the mid-west. This has created a limited supply of oil and gas. Now that oil and gas companies can produce less they have driven up the gas and oil prices to compensate for the lesser quantity of gas and oil sold. This relates to what we are studying in class as it illustrates how scarcity influences the price. A product retains a higher value as it becomes  scarcer. Oil has now become a more scarce resource in the US and therefore the prices have risen.

very constructive analysis of the problem. You seem very intelligent pascal.

G-7 call on oil-producing countries to increase their oil output in order to prevent high oil prices. The G-7 countries are prepared to call upon the International Energy Agency in order "to take appropriate action to ensure that the  market is fully and timely supplied." The IEA's countries supplied 60 million barrels of crude after the Libyan output was disrupted after the armed uprising. Oil prices have advanced 24 percent since reaching a 2012 low in June as stockpiles fell. U.S. authorities haven't contacted the IEA on the use of emergency oil supplies.  The U.S. has 727 million barrels of petroleum in reserve. Rising consumer prices have dented consumer confidence in gasoline, threatening to curb spending that accounts for 70 percent of the world's largest economy. The average price of a gallon of regular gasoline has increased by 23.5 cents this month. 

After the United States supported Israel in the "Yom Kippur" war, the Arab members of OPEC (Organization of Petrol Exporting Countries) announced an oil embargo with the US, where they would charge 70% more. In 1973, at the time of this restriction of oil, the OPEC was globally known as a large oil producer. This caused a shortage of oil, thus shifting the "supply curve" to the left, while the demand curve stayed constant. With this low supply, and constant demand, oil became a scarce good. In order to reach market clearance, or equilibrium, prices increased drastically. From $3 per barrel in 1971, to almost $40 per barrel in 1980. The shift in oil supply resulted in an increase in transportation costs. In order to compensate for the high oil prices, the Government of the United States increased domestic prices, thus increasing inflation. This inflation eventually led to relatively lower oil prices.

Demand article as Oil demand falls in China

The palm oil is used for many products and recently due to the pollution caused by the palm tree plantations, not as much oil can be produced without harming the environment. Many people who are environmentally aware will try to refrain from using products containing palm oil which are numerous. Products affected: processed food such as chips, instant noodles, soaps, shampoos and many cosmetic products. The awareness will cause the quantity of demand for these products to go down and as a result the prices will go down in order to keep the customers.

This article describes the effect of price ceilings on goods in Asia. Most countries in Asia have set caps to petrol prices and only seldom raised these. Commentators argue that if price of petrol does not rise with the price of the crude oil in the world, consumers in Asia (where the price for petrol is low) will use up so much that the price of petrol will increase too much and harm the economy rather than help it. In China foods have been monitored as well. Price have a ceiling and if this is to be raise the company must seek approval of the government. This is only a temporary answer to the problem of keeping prices low.

This is a demand article, because it talks about how the demand of Gas seems to not go up that much, or drop. Yet the Price of oil seems to rise a lot.