Question 3
Explain why oil prices have fallen this year (2020). Be sure to identify the changes in key determinants of
Oil or Crude oil is one of the most valuable commodities in the world. Changes in price of this commodity has an effect on the economy at various levels such as GDP and other factors. There has been a sudden drop in oil prices this year 2020 due to the worldwide Coronavirus pandemic .
The price drop has also also been a result of the decline in demand for crude oil from all over the world. The demand for oil has dived to great lows since the onset of this deadly pandemic forcing all the present quantity of oil to run out of storage space. Not having enough space to store has forced the producers to stop extracting and transporting oil.
Step by step
Solved in 2 steps
