Why is the world market for crude oil a competitive market?

12.The world market for crude oil is a competitive market because
A.It is a market with two sides: buyers and sellers
B.Competition is fierce among oil producers
C.A country that sells oil does not also buy oil
D.It has many buyers and sellers and no single buyer or seller can influence the price

3 Responses to “Why is the world market for crude oil a competitive market?”

  1. blankchocobo Says:

    If those are the answers you can choose from, it’s "D. It has many buyers and sellers and no single buyer or seller can influence the price."

    Cartels aren’t a single seller. The question might not be compeletely realistic, but those are the conditions that would produce a competitive market.

  2. Michelle Says:

    It isn’t "competitive" like you think. There are only a handful of companies involved in oil. Oil is lucrative because oil – by today’s standards – is a necessity. If oil prices rise to $100 per gallon, it will still be sold. It would just be reflected in the prices of goods. Oil prices aren’t regulated by the government. Why do you think so many wars are fought in the middle east and not in places like Rwanda – where there isn’t oil, but a need for peace? He who controls the oil controls the global economy.

  3. Bored Goblin Says:

    D is the definition of competition, but it does not apply to crude oil market, which is dominated by a few large producers, many of which are part of cartel that has a lot of control over oil’s price.