What Affects the Rise and Fall of Oil Prices? 21st February 2019 marked the ever-increasing Prices of Oil reaching a three-month high in the United States as part of a five-day winning streak for current oil prices. The cuts in supply introduced by the OPEC nations,
specifically Saudi Arabia, is speculated as one of the primary reasons behind the increase in current oil prices. Increasing demand, decreasing reserves and supplies, you don’t need to study economics to predict what actually does affect the rise and fall of Oil Prices. But what does actually? Or Who actually should be the question? The answer to which is simple, Traders. Now what would a good old Oil trader do? They bid on the futures contracts for commodities and that’s what primarily affects the rise and fall of Oil Prices in the international market. Various other factors are also involved which can influence the decisions of these bidders who are human after all. Washington and The Organization of Petroleum Exporting Countries are the key players to look out for. Now to the factors that influence: Supply and Demand: Supply in terms of output, access to future supply and the demand for oil determines the rise and fall of oil prices. The OPEC suppliers have been cutting on the supply to raise the crude oil prices to avoid getting the prices falling down to $35 a barrel as to their current target of $70 a barrel. Crisis and Conflicts: Unrest in the OPEC nations and conflicts between the same and the rest of the world are another key factor which gets the bulls charging onward. Crisis and Conflicts pose a threat to the free flow in exchange of resources; Money and Oil between the givers and takers. Come the conflicts such as the Arab Spring in 2011 concerning Libya and Egypt, prices can soar up above $100 per barrel.
Disasters and Spills: Nothing like a Natural Disaster that forces mankind to load up the reserves and nothing like a spill which can cause a scarcity in demand. The outcome, significant rises in prices of Oil. The current Oil prices has a lot many things influencing it’s rise and fall. The next time you want to put the blame on someone, you know who it is. The traders; They are only human after all.
Oil price today is for wti crude 51,36 USD
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