Answer to Question #113592 in Economics of Enterprise for Muhammad Ali

Question

Petrol and diesel prices have collapsed amid the coronavirus outbreak. According to figures released by Bloomberg, the cost of a barrel of fuel has fallen dramatically in the past months. A barrel of Brent Crude oil has now fallen from slightly under $65 in mid-January to currently trending in the mid to high $20s. The figure above indicates that oil price is at USD33.15 per barrel as of 6th April, 2020, obvious scenario of down trending.

Using the theory of Supply & Demand, analyse the factors that contributed to the downfall of global petrol price and evaluate the impact on socio-economy in your home country, Malaysia.

Answer 1

A barrel of Brent Crude oil has now fallen from slightly under $65 in mid-January to currently trending in the mid to high $20s. The figure above indicates that oil price is at USD33.15 per barrel as of 6th April, 2020, obvious scenario of down trending.