PART 2: DEMAND AND SUPPLY OF PETROL IN AUSTRALIA

a. The petroleum market in Australia currently reaches nearly 910,000 barrels of oil
consumed per day (Knoema 2021) with prices ranging from $74-$77 (Market Insiders n.d.) per
barrel. In general, petrol consumption tends to increase from the end of October until now
(changing from about 870,000 barrels/day to nearly 915,000 barrels/day). The market reaches
equilibrium when there are no factors affecting the buying decision of consumers as well as the
supply power of suppliers.

b. Demand for crude oil and refined petroleum products declined significantly from mid-
March 2020 onwards as a result of COVID-19 restrictions enforced around the world, causing in
sharp fall in crude oil and refined product prices (BITRE 2020). Restriction on travel and
economic activity because of The COVID-19 in Australia in mid-March 2020 resulted a
significant fall in the quantity of petrol being purchased from retail outlets. The proof is that in
April 2020, the price of oil fell as low as $ 33.43/barrel, down more than 2/3 of the price
compared to the beginning of 2020 ($89.72/barrel) (Indexmundi n.d.). The Demand curve D1
shifted leftward compared to demand curve of Q1 2020 .

c. In the forseeable future, the petrol market price will continue to increase from the end
of Q4 2021 until the end of Q1 2022 and will probably hit $80/barrel (Gareth 2021). Along with
that, the demand for gasoline will also continue to increase as the Australia economy emerging
from lockdowns and transportation and industry pick up. It has been forecast that the demand for
petrol in 2022 will increase by more than 910,000 barrels a day (Stanley 2021) while slightly
lowering its estimates for the final three months of this year. Therefore, in the near future, the D1
curve probably shift to the right and become the D2 curve. However, the global oil supply will
probably won't keep up with that surging demand. Despite of the increasing of petrol price, the
supply may not be enough to serve the market. The most important aspect to recognize about oil
is that new supply may not reach the market immediately (Bill 2021). Therefore, in short future,
the S1 supply curve will probably shift left to the S2 curve.

REFERENCES:

Markets Insider. n.d. “Crude Oil Price Today | Brent OIL PRICE CHART | OIL PRICE
per BARREL | Markets Insider.”. Accessed December 12, 2021.
https://markets.businessinsider.com/commodities/oil-price.

Knoema. 2021. "Australia - Total petroleum consumption".

https://knoema.com/atlas/Australia/topics/Energy/Oil/Petroleum-consumption?origin=knoema.fr
 The Bureau of Infrastructure and Transport Research Economics (BITRE). 2020. "Impact
of COVID-19 on petrol prices in Australia". https://www.bitre.gov.au/publications/2020/impact-
covid-19-petrol-prices-australia

Indexmundi. n.d. "Crude Oil (petroleum) Monthly Price - Australian Dollar per Barrel".
Accessed December 12, 2021. https://www.indexmundi.com/commodities/?commodity=crude-
oil&months=60&currency=aud

Gareth, Hutchens. 2021. "Will petrol prices rise above $2 a litre?".

https://www.abc.net.au/news/2021-11-25/will-petrol-prices-rise-above-2-a-litre/100646002

Stanley, Reed. 2021. "OPEC says oil demand will exceed prepandemic levels in 2022.".
https://www.nytimes.com/2021/09/13/business/opec-oil-demand-2022.html

Bill, Conerly. 2021. "Oil Forecast 2022 And Beyond".

https://www.forbes.com/sites/billconerly/2021/11/13/oil-forecast-2022-and-beyond/?
sh=4f55d286a67b