The Price Elasticity of Supply (PES) measures how a percentage change in quantity supplied is affected by a percentage change in price. To find the PES, the percentage change in quantity supplied (%Qs) is divided by the percentage change in price (%P). There are 3 possible answers to this equation. If the answer is exactly 1, it is said to be unit elastic. If the answer is more than 1, it is said to be elastic. If the answer is between 0 and 1, it is said to be inelastic. Factors that may affect the PES are the availability of producer substitutes and the option to use unused capacity. The availability of producer substitutes affects the PES because if a producer is able to substitute producing one good for another, it is said to be elastic. Examples of goods that are producer substitutes are milk and yogurt. An example of a good that is not a producer substitute and therefore inelastic are primary products like coffee. Primary products are products that have no been refined in anyway. Unused capacity affects the PES as if a producer is able to, at any time, make full use of their resources it is said to be elastic. A farmer who has two plots of land and only uses one has an elastic PES. If both plots are being used then the PES is inelastic. The Price Elasticity of Demand (PED) measures how the percentage change in quantity demanded is affected by the percentage change in price. To find the PED, the percentage change in quantity demanded (%Qd) is divided by the percentage change in price (%P). As in the PES, there are also 3 possible answers to the equation: unit elastic, elastic and inelastic, all of which are the same as in the PES. Two major factors that affect the PED are the addictive factor and the availability of consumer substitutes. The addictive factor affects the PED as consumers need certain goods. These goods often have no replacement, which causes them to be inelastic. An example of an addictive good that is inelastic is cigarettes. The availability of consumer substitutes affects the PED, much like the availability of producer substitutes does to PES. If a good is not easily substituted then it is inelastic. Both the PES and the PED of this article are inelastic. The PES is inelastic as there is no availability of producer substitutes when it comes to refining oil. The machines used specifically for refining cannot be used for anything else. Also the PES is inelastic because suppliers are not able to use any of their unused capacity as they are already using their ‘limited surplus capacity’ and with all the wage and labor decreases, suppliers do not have an access to more labor at any time. The PED in this article is inelastic because consumers need refined oil in their everyday lives. The lack of availability of consumer substitutes makes the PED inelastic. The price increase in oil has caused disequilibrium and a shortage. In Fig.1 the price increases from Pe to P2. This increase in price causes disequilibrium as the quantity demanded increases from Qe to Qd and the quantity supplied decreases from Qe to Qs. This shortage is caused, as the quantity demanded is more than the quantity supplied. OPEC is the Organization of Petroleum Exporting Countries. Its main goal is to achieve stable oil prices that are fair and reasonable for both producers and consumers. OPEC influences oil prices as it keeps the market stable, so that in Fig.1, there will be no disequilibrium. If the price of oil was to rise too high, consumers will not be able to afford refined oil for their cars and their heating. This will mean that the price will have to drop, so that there will be equilibrium.