Oil Price Dynamics Report

Our oil price decomposition, reported weekly, examines what’s behind recent fluctuations in oil prices: demand factors, supply factors, or some combination of the two?
February 19, 2019: Highlights

Oil prices rose over the past week owing to an increase in demand and a contraction of supply.

  • A strengthening in demand expectations and weakening of anticipated supply led to an increase in oil prices this week. In 2018:Q4, oil prices fell due to declining demand and increasing supply.
  • Developments in global demand expectations since 2017:Q3 have reversed the largely supply-induced weakness in oil prices throughout the first half of 2017.
  • Overall, since the end of 2014:Q2, both lower global demand expectations and looser supply have held oil prices down, though this trend seems to have reversed in 2016:Q2 and 2016:Q4, and notably since 2017:Q3.
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Released weekly on Mondays at 3 p.m. (Exceptions noted above.)

Note: To assist readers, the New York Fed is now publishing the data underlying the charts and tables. While the Bank does not share the code for its calculations, information about the methodology is available in the PDF report and the related reading noted on this page. The New York Fed does not offer individualized services to readers, such as custom charts or analysis.

Our analysis of oil price movements does not necessarily represent the views of the Federal Reserve Bank of New York, the Federal Reserve System, or the Federal Open Market Committee.

Related Reading
For more information about the methodology, see “Is Cheaper Oil Good News or Bad News for the U.S. Economy?Liberty Street Economics, June 8, 2015.

We also updated our analysis in “Lower Oil Prices and U.S. Economic ActivityLiberty Street Economics, May 2, 2016.

About the New York Fed’s Oil Price Dynamics Report
How oil price fluctuations affect the U.S. economy will depend on whether supply or demand factors are driving them. Our statistical model examines correlations of oil price changes with a broad array of financial variables to determine which forces best explain price movements. We update it each Monday at 3 p.m. (except during blackout periods surrounding Federal Open Market Committee meetings). When federal holidays occur on a Monday, the report is delayed by twenty-four hours. Find detailed information about our methodology within the report.