Huge oil importing countries such as china or india

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The price of oil is determined by supply and demand. The price of oil has fallen from $115 per barrel in mid July 2014 to as low as $50 in January 2015 and now hovering around $60 per barrel in mid June 2015 (a fall of almost 50%)

a) Based on your understanding of the economic theory of supply and demand, describe why the price of oil has continued to fall so much even though the consumption of oil has not decreased substantially

b) With oil price falling, there will be some countries that will benefit and some countries who will lose out. How would the fall in price of oil affect the economies of:

i) huge oil importing countries such as China or India (have very little oil of their own)?

ii) huge oil exporting countries such as Saudi Arabia or Iran ( have a lot of oil to export)?

iii) exporting a lot of oil as well as consumes a lot of oil as well internally ( USA or Indonesia)?Length: 1200 words maximum Report sections:The key sections to be included are: Executive summary; Usage of the economic theory of supply and demand, Describe the winners and losers in the fall in the price of oil; Conclusion; Bibliography and Appendix.Marking criteria:Executive summary 5 marksUsage of the Economics Theory of Supply and Demand 30 marksDescribe the winners and losers in the fall of price of oil 50 marksReferences and referencing 10 marksReport formatting 5 marksTotal marks 100%

Reference no: EM13844709

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