Question

can somebody explain the role of forces of demand and supply in gas prices comment on OPEC ? can somebody really explain the dumb down version please and thank you

Answer 1

There is an important role of the demand and supply forces, in deciding the gas prices. Id demand for gases are more than its supply, then gas price increases. If supply of gases are more than the demand, then gas prices comes down. Here, supply and demand are also affected by the factors like emergence of alternative energy sources and other substitutes. These factors can reduce the demand of gas so that prices are under the control. The OPEC are the the group of oil producing nations who produce crude oil and supply in the market. These are the basis of the production of different types of petroleum products. When OPEC nations increase the supply, though the demand remains constant, then price level decreases and vice versa.