Cogito

Why Oil Price is Increasing?

Posted in Uncategorized by qmarks on October 23, 2009

The answer comes from the Bank of Canada Monetary Report. A strong increase in demand from China, associated with large, commodity intensive infrastructure projects and some accumulation for investment purposes, has been a key contributor to the recent rise in commodity prices.

Stronger aggregate demand (household final consumption + capital expenditure + government expenditure) and the reduction in financing costs have provided greater incentives for companies to build inventories. These factors, together with supply cuts by OPEC, have also helped boost world oil prices.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: