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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.

  1. AGrowth in industrial activity of major consuming economiesCorrect
  2. BProduction cuts announced by exporting countries
  3. CDisruption of supply through pipeline outages
  4. 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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