OWEISS DEMAND CURVE EXPLAINED. Above is Dr. Oweiss's demand curve for oil which he devised to help explain why oil prices must decline further. He explains: "The demand curve for petroleum will change its elasticity over time resulting from price increases or decreases. As oil prices rise slowly from PA to PC, the demand curve is inelastic as it moves from point A to point C. The quantity of oil is perhaps slightly reduced from QA to QC but is generally unaffected. Consumers are unwilling to change their consumption patterns due to only small increases in oil prices and continue to buy petroleum products at the same rate. In the second time series from point C to point E with substantial increases in the price of oil (from PC to PE), the demand curve becomes increasingly more elastic. The result is a tremendous drop in the demand for oil at PE and the quantity demanded is reduced to OE. Consumers cannot afford the higher oil prices and accordingly change their oil consumption patterns. In the third time period from point E to point G, oil prices fall moderately from PE to PG. A small decrease in oil prices will not drastically increase the quantity of oil demanded (from OE to OG) because consumers will not suddenly alter their new substitution habits and companies will not change their conservation technologies and policies. If, however, in the fourth time frame, oil prices are substantially reduced from PG to PI, then the quantity of oil demanded will increase in due time from QG to QI. Consumers will eventually resume their former consumption patterns as prices move lower, but they will never totally surrender their substitution tendencies."

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