Demand, supply, and price of oil

Oil analysts in the article in "Time" say that the traditional laws of demand and supply do not always apply to the prices of oil.   Well of course one of the key factors that influence the demand for oil is the current economic situation in most of the countries that are hit by the recession. If the country is hit by the recession, they cannot afford overpriced oil so the demand goes down. However, there are some other factors that influence the demand for oil and one of them is the rising price of oil. Rising price of oil is caused by the oil-producing countries that store a lot of supplies of oil because they are hoping for a global economic recovery. As the amount of supplies that are not sold rises, the inventories start to run out of the space for more supplies. If they run out of space they would be forced to sell the oil much cheaper ($10 a barrel) which would not bring any profit. This is also one of the key components of pricing. Another component of pricing is based on how do OPEC leaders stabilize the price of oil so that it suits their own economy’s needs. The leaders of OPEC whose economies are very dependent on oil exports, had problems with stabilizing the prices of oil that would suit their own economic needs among rising supplies of oil and falling demand. For example, the prices rose to $147 a barrel in July and then again radically dropped to $30 a barrel five months later. Therefore, the OPEC members had a meeting and decided to maintain the output at the current levels rather than increase the supplies. We would not expect them to maintain the same level of output because they clearly knew that if they increased the level of the output it would bring a relief to the "gas-guzzling West." This is when we see that the traditional laws of supply and demand do not apply because as the demand for oil increased we would expect that they would supply more oil. However, they did not do it because they knew that if they increased the supplies the price will radically drop and affect their own economies.