Most people understand the basics of economics. Recently there has been a worldwide glut of oil and so there was competition among producers that led to the oil price falling to below $50 a barrel which meant many producers were selling at a loss. Supply and demand largely dictate prices but in the case of oil, we also had to look at how much oil was stored. It will take a while before those stocks are deleted. When oil stocks are low then the oil price could soar to new heights again.
Last year when I wanted a new microwave, I shopped around and went to Comet in the end. Now Comet has closed down, I have less choice and so when my freezer died I checked them out online and went to Curry’s to buy one. There is now less competition for Curry’s and so they will fill the gap left by Comet and sell more. There is still lots of competition in that market though. (more…)