Gasoline Prices, Peak Oil & Economics 101
Peak oil is having interesting impacts on the prices for both oil and gasoline.
The prices changes can be understood by looking at the oil demand curve and oil supply curve.
Below is a link to a 10 minute screencast that explains the supply and demand economics of changes in supply or demand for oil. The screencast also explains the changing in oil and gasoline prices over the past three years.
Gasoline Prices, Peak Oil & Economics 101
Peak Oil & Gasoline Prices - An Economics 101 screencast
(Note: the screencast is 7,100 KB, so this will only work well on high-speed broadband connections. Also, this video is fairly technical in nature. It starts with a review of supply and demand curves, and the changes in prices levels caused by changes in supply or demand. In other words, think of it as the 10 minutes your Econ professor forgot to share with you.)
After watching the screencast, ask yourself a few questions...
1. How will changes in supply (due to peak oil) impact the national economy? The global economy?
2. What will be the impact of rapidly increasing and decreasing prices have on the economy? Inflation? Deflation? Stagflation? Recession? Depression?
3. Where will demand be destroyed? The USA? Europe? Asia? Africa?
Look at the graph below.
4. How do supply and demand explain the seasonal price changes of oil and gasoline?
One final question...
5. How will the oil futures market impact the demand for oil and the price level once the consensus view is the oil supply and oil demand curves are both essentially vertical?
I've written two earlier articles on the supply and demand of peak oil. They may be helpful in explaining the concepts in the screencast.
Peak Oil - Inelastic Supply meets Inelastic Demand
Peak Oil, Economics 101, and The Worst Depression
The prices changes can be understood by looking at the oil demand curve and oil supply curve.
Below is a link to a 10 minute screencast that explains the supply and demand economics of changes in supply or demand for oil. The screencast also explains the changing in oil and gasoline prices over the past three years.
Gasoline Prices, Peak Oil & Economics 101
Peak Oil & Gasoline Prices - An Economics 101 screencast
(Note: the screencast is 7,100 KB, so this will only work well on high-speed broadband connections. Also, this video is fairly technical in nature. It starts with a review of supply and demand curves, and the changes in prices levels caused by changes in supply or demand. In other words, think of it as the 10 minutes your Econ professor forgot to share with you.)
After watching the screencast, ask yourself a few questions...
1. How will changes in supply (due to peak oil) impact the national economy? The global economy?
2. What will be the impact of rapidly increasing and decreasing prices have on the economy? Inflation? Deflation? Stagflation? Recession? Depression?
3. Where will demand be destroyed? The USA? Europe? Asia? Africa?
Look at the graph below.
4. How do supply and demand explain the seasonal price changes of oil and gasoline?
One final question...
5. How will the oil futures market impact the demand for oil and the price level once the consensus view is the oil supply and oil demand curves are both essentially vertical?
I've written two earlier articles on the supply and demand of peak oil. They may be helpful in explaining the concepts in the screencast.
Peak Oil - Inelastic Supply meets Inelastic Demand
Peak Oil, Economics 101, and The Worst Depression