Illustration of change in supply and demand

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Reference no: EM1316209

Illustrate a supply or demand curve shift for the following article... (Make only one shift).

Crude gets pushed under $38

The price of oil fell on Monday, January 12, 2009 as the weak economy has undermined oil demand. Light, sweet crude for February delivery fell $3.24 or 7.9%, to $37.59 a barrel. Last week, oil fell nearly $8 a barrel as a report from the Labour Department showed the nation\'s economy lost a total 2.6 million jobs last year. The December unemployment rate jumped to 7.2%, its highest level in more than six decades. To make matters worse, the price of oil lost more than half its value in 2008. The global economic slowdown has undermined demand.

Monday's decline comes despite recent reports that Saudi Arabia plans to cut output by up to 300,000 barrels per day below its previously announce target deduction. Members of the Organization of Petroleum Exporting Countries (OPEC) have been drastically cutting back supply in an attempt to stop the rapidly falling price of oil. But the strategy has had limited success as supply levels remain high and demand continues to deteriorate.

Reference no: EM1316209

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