NISM Certifications · NISM-Series-XV: Research Analyst · Fundamental Analysis of Commodities
Which of the following is generally a demand-side factor influencing the price of crude oil?
Growth in industrial activity of major consuming economies is a demand-side factor, because stronger activity raises energy consumption and therefore crude oil demand. Production cuts, pipeline disruptions and higher output with rising inventories relate to supply conditions rather than demand.
- AGrowth in industrial activity of major consuming economiesCorrect
- BProduction cuts announced by exporting countries
- CDisruption of supply through pipeline outages
- DIncrease in inventories due to higher output
Explanation
Demand is driven by economic and industrial activity in consuming countries. Production cuts, pipeline outages and output-driven inventory builds all arise from the supply side.
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