Why will oil be able to raise the prices? Seems like with less demand it’d be cheaper.
That’s what you’d think. But they’re capitalists and will squeeze every penny they can to their dying breath.
Supply and demand is largely a myth, especially in markets like oil where it’s practically a monopoly.
Is not a monopoly though, yes there are cartels but it’s not a monopoly. The less demand there is for oil the less power OPEC has to manipulate prices. They will be left scrambling to supply the remaining demand. Supply and demand isn’t a myth, OPEC simply manipulate supply to influence the price.
The fact that they can just manipulate supply I what makes supply and demand a farce with oil. Demand doesn’t change the price, only supply.
Oil and gas could still be cheap today, there’s no shortage of oil at all, so they create the conditions necessary to benefit them. They’ll do exactly the same thing as demand for oil peters out, but they’ll wring the neck of that goose tighter and tighter until it finally dies. And it’s the people who can’t afford a new car that will suffer the worst when that happens.
Same reason why oil prices keep going up even as demand drops, the price of oil is largely determined by OPEC+ and they will cut production until prices rise to where they want them, and the more they have to cut production the higher the prices have to be to offset their fixed costs. More oil = more total revenue = lower price floor for profits.
