Why or how would slowing of the economy actually cause oil prices to increase?

does that make any sense??





if the economy is slowing wouldnt that mean less need for fuel??





and in return wouldnt that mean oil prices would actually go down and not up??





why and how so??





Thanks for your answers!Why or how would slowing of the economy actually cause oil prices to increase?
It would reduce the demand to some extent but the value of the pound would fall against the US dollar and oil (among other things) is priced in us $'s so it would cost moreWhy or how would slowing of the economy actually cause oil prices to increase?
If we look at the US economy in isolation, a slowing of economic growth would reduce demand for oil and consequently put downward pressure on the price of oil.





However, oil is a globally traded commodity. The price is set by global supply and demand. So the economy of the entire world on average would have to be declining for the above analysis to hold true.





A key final point: While oil is globally traded, it is trypically denominated (or ';priced';) in US dollars. If the US economy slows, it is likely that the US dollar will weaken. If this happens, it will take MORE dollars to equate the previous selling price.





So there are two opposing forces: 1) demand reduction leading to price decline; 2) exchange rate decline of US dollar. The net result could be either increase or decrease in price of oil, depending on which of these two effects is stronger.
depending on the need for oil .......in North America we use oil everyday so when scarcity comes into play the price will go down. if our economy was slowing down people would still need oil to get to work.......it just the way people have come to live in north america. if people need oil they will pay a premium for it until they cannot afford it.......i think prices would only go down if we found more oil somewhere.....that would lower its scarcity.
The recent oil spikes were caused by speculators. It`s coming down tho slightly, at the moment.





Unfortunately, until we can replace it with something else, it has become the most valuable commodity on the planet. I wonder how much it will cost when it is finally really running out?
You are right. It won't cause oil prices to rise. It might cause the decline in value of the dollar, and oil is priced in dollars, but oil itself becomes less valuable in a less productive economy.
I think its going up coz we are running out!