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Despite the approach of winter, oil prices to indus- trial

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Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 08 Apr 2004, 04:15
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20. Despite the approach of winter, oil prices to industrial customers are exceptionally low this year and likely to remain so. Therefore, unless the winter is especially severe, the price of natural gas to industrial customers is also likely to remain low.

Which of the following, if true, provides the most support for the conclusion above?

(A) Long-term weather forecasts predict a mild winter.

(B) The industrial users who consume most natural gas can quickly and cheaply switch to using oil instead.

(C) The largest sources of supply for both oil and natural gas are in subtropical regions unlikely to be affected by winter weather.

(D) The fuel requirements of industrial users of natural gas are not seriously affected by the weather.

(E) Oil distribution is more likely to be affected by severe winter weather than is the distribution of natural gas.

Last edited by Abhishek009 on 10 May 2016, 10:59, edited 1 time in total.
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Re: Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 08 Apr 2004, 11:23
I like B.
It creates a tie between the demand (price) for oil and gas.

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Re: Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 08 Apr 2004, 17:07
I will go with B.

Oil prices are low even during winter. This can happen if customers can switch from oil to gas or there is sufficient supply of oil. Since the prediction that severe winter will not affect the prices of gas then either customers must be switching to oil from gas or the gas supply is not affected.
The problem with E is that if oil supply is affected by severe winter then there is atleast one possibility of customers selecting gas and driving up the demand. E says severe weather affects oil more than gas. So gas prices will always remain low then irrespective of weather.

Whereas if B is true then customers can balance between gas and oil depending on the prices. Hence suppliers of gar dont want to increase prices.

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Re: Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 08 Apr 2004, 19:49
I totally misinterpreted this question. Yes, B should be it. :oops:
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Paul

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Re: Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 10 Apr 2004, 10:23
OA is B.

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Re: Despite the approach of winter, oil prices to indus- trial [#permalink]

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New post 10 May 2016, 11:15
batliwala wrote:
20. Despite the approach of winter, oil prices to industrial customers are exceptionally low this year and likely to remain so. Therefore, unless the winter is especially severe, the price of natural gas to industrial customers is also likely to remain low.

Which of the following, if true, provides the most support for the conclusion above?

(A) Long-term weather forecasts predict a mild winter.

(B) The industrial users who consume most natural gas can quickly and cheaply switch to using oil instead.

(C) The largest sources of supply for both oil and natural gas are in subtropical regions unlikely to be affected by winter weather.

(D) The fuel requirements of industrial users of natural gas are not seriously affected by the weather.

(E) Oil distribution is more likely to be affected by severe winter weather than is the distribution of natural gas.



Low Oil prices to industrial customers in winter ====> Price of natural gas to industrial customers will also be low

So, there must be a relation between Oil prices to industrial customers and Price of natural gas :lol:

How can you strengthen this relation ?

By showing that even if some adverse factors affect the supply of natural gas prices remain same..

(B) Shows exactly that relation , switching to Oil from Gas ( by quickly and cheaply switch to using oil )

Hence correct answer will be (B)

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Abhishek....

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Re: Despite the approach of winter, oil prices to indus- trial   [#permalink] 10 May 2016, 11:15
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