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Wednesday, June 06, 2012

Fed Watch: Supply and Demand

Tim Duy has a question:

Supply and Demand, by Tim Duy: I caught this via Brad Plummer:

Oil

Am I the only one who finds this kind of chart uncomfortable?  Because it seems to say that quantity demanded is consistently higher than quantity supplied, which could only be maintained via a perpetual inventory drain on the order of what looks to be a couple of million barrels a day. I don't think that's happening.  If production is really at the levels indicated in this chart, what stops prices from rising and collapsing quantity demanded down to quantity supply?  
What am I missing?

    Posted by on Wednesday, June 6, 2012 at 09:34 AM in Economics, Oil | Permalink  Comments (10)


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