Which of the following can cause oil glut in the International market?

Analyze the question: The question asks what can cause an "oil glut" in the international market. The key is knowing what "glut" means.

Explain the concept: A glut is an oversupply, meaning there is more of a good available than buyers want at the current price. In economics, this is called excess supply (or a surplus). When this happens, prices tend to fall.

An oil glut occurred, for example, in 2014-2016, when oil production (including US shale oil and continued OPEC output) outpaced global demand. Crude oil prices, which Nigeria depends on heavily, dropped sharply as a result.

Step-by-step solution:

• A. Excess demand over supply: This is a shortage, not a glut. It pushes prices up. ❌
• B. Under-capacity utilization: This means producers are using less than their full production capacity, so output falls. That works against a glut. ❌
• C. Excess supply over demand: Supply exceeds demand, so unsold oil accumulates. This is the definition of a glut. ✅
• D. Economic boom: A boom raises incomes and demand for oil, which reduces the chance of a glut. ❌

Answer: The correct option is C. Excess supply over demand.

Exam tip: Remember that "glut" = "too much." Whenever you see glut, surplus, or oversupply, think supply > demand → prices fall. Whenever you see shortage, think demand > supply → prices rise.