Does the number of barrels sold go down when the price per barrel goes up? Why dont they report that number?

Question

When "oil futures" are "bought", dont the buyer specify the number of barrels they want at that price?

Answer 1

You can find statistics on world and regional oil production, transport, sales and consumption from the American Petroleum Institute (API) http://www.api.org/statistics/ or from industry magazines like "Oil & Gas Journal" http://www.ogj.com/index.cfm .

The data reported on these sites are what the industry uses to make internal business decisions.

Answer 2

The supply and demand theory says that when price goes up, demand goes down. In this case (I assume you are speaking of the price of oil per barrel), oil is a very in-elastic product. Meaning, that the demand for the product (oil) is not highly affected by price changes. For example, when gas prices go up to around $1.20/litre do you buy less gas? No, because you need it....this is a very "in-elastic" product. So to answer your question, I don't believe the number of barrels sold changes much at all, which is why it isn't reported because the change in numbers is very insignificant.

Answer 3

To which number does "that" refer?

They can only report the actual number of barrels sold, not the hypothetical number of barrels that might have been sold at a different price.

But a better answer is that all barrels of oil are sold, it's just the price changes and the last barrel goes to the highest bidder (in a very over-simplified fashion).

Answer 4

If all oil were bought in the spot market, that would be true (although demand for oil is fairly inelastic, so the change might not be much). But most oil is bought in forward purchase contracts where companies commit for guaranteed quantities at a negotiated price. The variable spot price doesn't affect the quantity and price of these contracts at all.