Dr. Ed’s
Economic
Indicators

OIL

Release Date: Daily
Release Coverage: Month-End
Released By: Energy Information Administration
Official Release: http://tonto.eia.doe.gov/oog/info/twip/twip_crude.html

This index tracks the price per barrel of crude oil. Because crude oil is the major component in making gasoline, clearly, changes in crude oil prices will affect retail gasoline prices. But, because of the lag between refining crude oil and the distribution of gasoline to retail stations, changes in retail prices typically lag crude oil price changes by at least a week or two, and often take up to four to eight weeks to see the full impact.

WHAT DR. ED SAYS:

Watching oil prices along with the Consumer Price Index is a key way to monitor price fluctuations in your market. Sometimes inflation seems to be rapidly rising or falling, but when closer examined, oil price is a key contributor to these changes. Monitoring which industries, customers, or clients may be affected in your area will give you further insight into the current market conditions and whether your market is at an advantage with the change in oil prices.

Oil demand also tends to coincide with economic growth. Much of the world's production is heavily reliant on oil. As we see oil prices climb as a result of demand, there may be some economic growth in the near future due to expansion in production.

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