NY Fed: Oil prices rose sharply this past week owing to greater demand and decreased supply

Below are key highlights from the Federal Reserve Bank of New York's Oil Price Dynamics Report.

• The combination of stronger expected demand and a perceived tightening in supply led to a significant increase in oil prices last week. In 2018:Q2, increasing demand expectations and decreasing anticipated supply led to rising oil prices.
• 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.