Supply or demand? IMF breaks down collapse in oil

April 14, 2015 1:47 PM

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Supply or demand? IMF breaks down collapse in oil

One of the most important questions for economists about the past year’s collapse in oil prices is whether it was driven by supply or demand.

If the price drop was caused by increased supply, then it’s good news for the economy as prices fell simply because oil is available in more abundance. If prices fell because demand in the economy was weak, it would be bad news, signaling the economy’s fundamentals were deteriorating.

Also read: U.S. Stocks Mixed After Jobs Report; Global Shares Down

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