Business
The economic laws of supply and demand are best observed in oil markets. There’s no difference in oil pulled from Russia or West Texas Shale, except the grade so the only things driving price are supply and demand. And with the Coronavirus causing huge drops in air travel and other sources of demand for oil, the only way to maintain price is to cut supply. That’s what Saudi Arabia wanted to do but Russia refused, sending prices down more than 20% in the face of declining demand. Now add to that a plan by Saudi Arabia to increase supply by more than 25%. Yet futures prices rallied slightly in expectation of some increase in demand in April and May, as the virus threat passes. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.