What Is Causing Oil Price Fluctuations:
To avoid being caught in a similar situation in the future, it helps to understand why how oil prices fluctuate. Today's infographic from jones oil is here to help us understand the many different issues that can impact global oil prices.
it covers supply and demand, weather, technology, geopolitics, as well as other factors that make oil prices fluctuate.
in the aftermath of the supply imbalance that brought key crude benchmarks to decade lows, significant efforts taken to quell the glut have largely paid off, pushing futures price to multi-year highs.
watch our video brought to you by plus 500 to understand how decision making over the next few month by the world's largest oil suppliers will likely affect oil prices and related makets.
These include weather events, supply interruptions (such as worker strikes or spills), broader demand trends such as the emergence of renewable energy, OPEC decisions, or other events that can have an immediate effect on supplies.
There are also meta factors, such as the “fear” that a future event may happen that could in turn affect supply and demand. This is where geopolitical risks get priced in, such as potential escalation of conflict in the Middle East or future election results of oil exporting nations.
Information and forecasts can also play a role. Imagine being an oil producer in early 2014, hearing some of the bullish reports above. Would you, or would you not invest in a project that had a break even of $60/bbl oil? Even a significant oil price fluctuation of +/- 30% would still have you come out on top.
However, as in the situation in 2014, this would have actually increased margin production, which would have only added to the glut in supply.
some more major reason for the cause fluctuation of the price of crude oil.
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