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NISM Certifications · NISM-Series-XV: Research Analyst · Fundamental Analysis of Commodities

Which of the following is most likely to cause a rise in the price of crude oil, other factors remaining unchanged?

A major supply disruption in a large producing region would most likely raise crude oil prices because it cuts available supply. Higher production quotas, rising inventories and a slowing global economy all increase supply or reduce demand, which pressures prices downward.

  1. AAn unexpected increase in OPEC+ production quotas
  2. BA major disruption of supply from a large producing regionCorrect
  3. CA sharp rise in global crude inventories
  4. DA global economic slowdown reducing fuel demand

Explanation

A supply disruption shifts the supply curve left, raising prices. The other options either increase supply or reduce demand, which push prices down.

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