Every Wednesday there is an oil inventory Number given out by the Energy Information Administration (EIA)....

Every Wednesday there is an oil inventory Number given out by the Energy Information Administration (EIA). If the crude inventories decrease, what does that explain? Group of answer choices

c. Signal that demand outstrips production leading to lower prices.

a. Signal that demand outstrips production leading to higher prices.

d. Signal that production outstrips demand leading to higher prices

b. Signal that production outstrips demand leading to lower prices.

Solutions

Expert Solution

Answer - Signals that demand outstrips production leading to higher prices.

When there is decrease in inventory , it means that demand is higher than production. Higher demand leads to higher prices. Production will outstrip demand when inventories rise. Hence other options are wrong.

Rahul Sunny answered 1 year ago

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