IB ECONOMICS: A simple explanation of falling oil prices

oil-explainer-feb-master1050The oil industry, with its history of booms and busts, is in its deepest downturn since the 1990s, if not earlier.

Earnings are down for companies that made record profits in recent years, leading them to decommission more than two-thirds of their rigs and sharply cut investment in exploration and production. Scores of companies have gone bankrupt and an estimated 250,000 oil workers have lost their jobs.

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IB ECONOMICS: Supply and Demand -Oil Prices

For those studying IB ECONOMICS
Fluctuating oil and commodity prices are a common feature in paper 2 exam questions. This article helps reinforce how understanding fundamental concepts such as supply and demand can help demystify current economic issues.