I have quite a number of Oil & Gas (O&G) stocks in my portfolio. Yet, I never go and find out how do the demand and supply curves for oil look like, until Jan this year. The demand and supply curves would provide a clear picture of the territory upon which the battle of O&G would be fought. I always thought that demand would be inelastic while supply would be elastic. It turned out that I was wrong. This is the model that I managed to find on the internet (source:
Energy Matters).
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Fig. 1: Demand and Supply for Oil |
The various coloured dots represent the actual oil production in the world at different points in time. A curve is fitted through the dots to form the supply curve for oil. The demand curve for oil is conceptual only and is shown by the 2 sloping straight lines, representing ......