Multiple choice

Some analysts perceive that the real reason behind the rising oil prices is increased speculation about the future value of oil. Specifically, the belief that oil supply is lower than it is and that future oil supply will be just as low have led the traders to inflate oil prices at present. While most of the data show that the output has been slowing down, it is possible that this speculation could account for some hike in oil prices at present.

Which of the following could best weaken the claims made in the above passage?

  1. Oil prices are much more a function of global demand and supply than anything else.

  2. Across the globe, there has been a significant prospecting activity and many oil wells have been discovered in the past five years.

  3. Several alternative sources of energy like bio-diesel, bio-fuel and CNG have been developed and are becoming more and more popular.

  4. The rate of growth of oil consumption has slowed down in the past two decades.

  5. There has been a long drawn campaign in the US by environmentalists against the disadvantages of using oil as a source of energy.
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A Correct answer
Explanation

The option clearly indicates the global demand and supply factors as being the single most important determinant of oil prices. It directly contradicts the passage, which talks of perceptions about future as being the major factor in deciding oil prices.

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