Wednesday, July 6, 2011

Why Oil Prices Fell

Pretend it's a multiple choice question. Oil prices fell yesterday to about $95/barrel. What caused the decline?

a) A slowdown in manufacturing growth in China.
b) Concerns about euro debt.
c) Plans for an interest rate hike in China.
d) Could be all of the above, or none of the above.

My money's on D. Coming up with plausible reasons for a price change, and actually being able to prove the reason for the price change, are two so very different things.

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