Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

If I may add a footnote—I think you also need to watch the pattern of how inventories have behaved. When prices were being pushed up in the process from, say, the end of 2003 to their various local peaks, the incentive to hold inventories rose. At some point in 2006, inventories were very high—we had basically filled every bucket we could find with crude oil—and inventories feed back. It’s a dynamic. Price changes create the demand for inventories. The real-time value of inventories feeds back on the price. So I think you saw some of that going on as well in 2006 in terms of driving the price versus driving usage. Purchase for inventory is not well measured. We have inventories only for the OECD, so separating production from consumption is not perfect because we can’t always capture the inventories and they are measured as consumption in some cases.

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