International Monetary Fund researchers said the benefits from cheap oil may not materialize until demand in the global economy picks up and central banks in advanced nations move away from near-zero interest rates. Despite a significant drop in oil prices since June 2014, economists are still looking for the positive effects of cheaper oil. While the main reason why prices have fallen has been an increase in global supplies, a new IMF report shows that domestic demand has been weaker than forecast in oil-exporting countries last year, while falling short of expectations in oil importers such as the U.S. and Europe. Researchers argued that in an environment where oil prices are low and central banks cannot reduce policy interest rates further, “the decline in inflation owing to lower production costs raises the real rate of interest,” making it more expensive to borrow and stifling demand, the paper said. Conversely, […]