Oil-Price Dynamics
By TAKUJI FUEKI ET AL
There is growing interest among academics, policymakers and market practitioners in the causes and consequences of oil price fluctuations. Various supply and demand factors are known to drive oil prices. Changing oil prices can affect the economy in different ways, depending on the factors driving the change.
The ability to infer the respective drivers has important implications for the appropriate policy response to changing macro-financial conditions from both global and domestic perspectives.… For instance, as oil is storable, not only realised demand and supply but also inventories affect investors’ expectations about future oil supply and demand.