| Despite the astounding surge in the oil supply over the last year, the Bank of England reported that 60 percent of the recent decline in oil prices was due to demand factors. Cumulative percentage change in the Brent oil price since June 19, 2014, based on 200 commodity price co-Movements. Source: Bank of England November 2015 Inflation Report.
The BOE bases this analysis on the co-movement of oil prices with those of other commodities. If oil prices drop simultaneously with other commodity prices, then presumably some common cause is the source. The supply of a range of commodities is unlikely to balloon all at the same time. Therefore, if supply is not the cause, then weak demand is likely to blame...............................................Full Article: Source
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