That illustrates supply and demand - Article Example

Article that Illustrates Supply and Demand The article ‘Global Oil Prices Down on Ample Supply, Soft Demand, But Up in U.S.’ by Nicole Friedman reflected the fact that the market condition of the economy is highly affected with the shift in the global oil pricing. The article presented the fact there is trends of fall in the global oil price below $100 a barrel on September 2014 for the very first time in the last 16 months. It thus reflected that the oil price is falling mainly due to weak demand.

The article reviewed that oil price will widen in the some ‘near-term contracts’ and ‘later-term contracts’. Additionally, apart from the global shift in the oil pricing, the US economy is rebounded from the eight months low profitability index in that period. Fluctuations in oil pricing have a prominent effect on the nation’s economic activities, which directly related to the economic growth. In this context, every respective activities of the nation are identified to be depended on the oil prices due to globalization and liberalization, which led to high reliance over the import and export operations.

The changes in the prices of the oil will have transformed the real pricing of goods and/or services. Moreover, prices are one of the key variables in the economic term, which highly affects the demand along with supply of the same. In this regard, it can be stated that the major determinant of the oil prices includes the demand as well as supply and the market sentiment. Moreover, different nations are also identified to have high contribution towards oil consumption, which correspondingly affects the pricing policies.

While, assessment of the article it can be recognized that rise in the oil price will decelerates economic growth of the US in much higher extent. The country is not much dependent to the import of oils because of the dependence of other countries on the goods as well as services offered by the US have developed better competitive advantage globally. The article significantly notified that with the fall in oil pricing in the global market, the US and global benchmarked oil pricing has been narrowed down.

Moreover, relatively cheap oil pricing in the US have encouraged various refineries to process more crude at a higher rates and with this significant reason the demand of the US crude oil has raised apart from the variation in the global oil prices (Friedman, 2013). ReferenceFriedman, N. (2013). Global oil prices down on ample supply, soft demand, but up in U.S. Retrieved from http://online.wsj.com/articles/brent-price-falls-as-hot-spots-cool-1410258248