You write that the surplus in oil inventories is due to a weakening economy and lower gas prices. But the logic of this escapes me. From what I've been reading, the low price of oil has been a boon to the average American - equivalent to a $750 tax cut. That excess money is being spent elsewhere which will be a boost to the economy. And more Americans are taking advantage of the low prices to travel/commute more. Most business have lower costs to produce/deliver their goods and to match the increased demand are hiring more. How would all this cause a economic weakness and a decrease in demand for oil?
It is basic economics that when the price of a commodity decreases, demand for that product increases. Why would that not be the case here? What am I missing?
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You write that the surplus in oil inventories is due to a weakening economy and lower gas prices. But the logic of this escapes me. From what I've been reading, the low price of oil has been a boon to the average American - equivalent to a $750 tax cut. That excess money is being spent elsewhere which will be a boost to the economy. And more Americans are taking advantage of the low prices to travel/commute more. Most business have lower costs to produce/deliver their goods and to match the increased demand are hiring more. How would all this cause a economic weakness and a decrease in demand for oil?
It is basic economics that when the price of a commodity decreases, demand for that product increases. Why would that not be the case here? What am I missing?
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