Supply and Demand is Like Gravity

As many of you know, I follow macro economics and from time to time I share perspectives on the implications of underlying aspects of industries that ultimately affect real estate or the economy in some way. On today’s show we are talking about oil. It’s been a while since we have looked at what’s happening in oil and gas.

To start with we have not seen any appreciable change in oil prices over the past two years. They’ve traded within a fairly narrow range between $70-$90 per barrel. There have been a few excursions outside that range. These days, prices are hovering between $60-$70 per barrel for most of this year.

This is an indication of fairly balanced supply and demand. The latest 50% tariff levelled against India as punishment for buying Russian oil is totally missing the point.

This has become a massive game of musical chairs. At the end of the day, supply and demand will always seek to find an equilibrium, just like gravity helps water find its equilibrium.

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