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Oil Price Dynamics Report: Oil Prices Dropped Owing To A Decrease in Demand and Slight Increase in Supply
Oil Price Dynamics Report: Oil Prices Dropped Owing To A Decrease in Demand and Slight Increase in Supply
Oil prices dropped owing to a decrease in demand and slight increase in supply.
∎ Oil prices fell sharply as a result of weaker demand expectations ∎ Developments in global demand expectations since 2017:Q3
and a slight loosening in anticipated supply. In 2018:Q3, increasing have reversed the largely supply-induced weakness in oil prices
demand expectations and broadly unchanged supply led to rising throughout the first half of 2017.
oil prices.
∎ Overall, since the end of 2014:Q2, both lower global demand
expectations and looser supply have held oil prices down, though
this trend seems to have reversed in 2016:Q2 and 2016:Q4, and
notably since 2017:Q3.
Our analysis of oil price movements does not necessarily represent the views of the Federal Reserve Bank of New York, the Federal Reserve System,
or the Federal Open Market Committee.
New York Fed / Research & Statistics Group ©2018 Federal Reserve Bank of New York Oil Price Dynamics Report / November 19, 2018 1
Cumulative Weekly Decomposition, Jul 06-Nov 16, 2018 Recent Decomposition Data
Percentage change ∎ The chart at left depicts the cumulative oil price decomposition
30
Brent price from July 6, 2018.
Jul 6, 2018
20
$77.11 ∎ The table below presents the most recent cumulative values.
Brent crude
10 price
Cumulative Percentage Changes since July 6, 2018
Supply
Demand Residual
-25 Demand
-50 Supply
-75
New York Fed / Research & Statistics Group ©2018 Federal Reserve Bank of New York Oil Price Dynamics Report / November 19, 2018 2
Oil Price Decomposition Q&A
New York Fed / Research & Statistics Group ©2018 Federal Reserve Bank of New York Oil Price Dynamics Report / November 19, 2018 3