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

Which of the following would generally be expected to push up the price of crude oil, other things remaining equal?

A cut in output quotas by major producers would generally push crude oil prices up because it reduces supply while demand stays unchanged. Inventory releases add supply and a global slowdown reduces demand, and both tend to lower prices.

  1. AA decision by major producers to cut output quotasCorrect
  2. BA sharp rise in global electric vehicle adoption in the immediate term
  3. CA rise in strategic inventories being released to market
  4. DA global economic slowdown reducing industrial activity

Explanation

Cutting production quotas reduces supply, which raises prices if demand holds. Inventory releases add supply, and a slowdown cuts demand, both pushing prices down. EV adoption reduces demand over time, not raising price.

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