From June to September 2022, oil prices in the United States declined by about 35 percent. During
Question:
From June to September 2022, oil prices in the United States declined by about 35 percent. During these same months, U.S. oil production remained roughly constant, and stocks of oil in storage increased. An article in the Wall Street Journal published at the end of September 2022 noted that despite the decline in oil prices, there was “widespread agreement on Wall Street that the fundamentals should mean a rebound,” and “Wall Street forecasts prices will rise.” When oil prices are falling, why might oil firms continue to produce oil? Does your answer depend on what oil firms expect to happen to oil prices in the future? Briefly explain, making sure to include in your answer a discussion of any movement along or a shift in the supply curve for oil.
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