In an unstable financial climate, the crude oil markets may see a spike in demand and supply if investors are uncertain about the state of the US economy. Crude oil prices could go up against a cautious rise in risk appetite due to an uncertain economic outlook.
Gold prices also see support when fiscal stimulus hopes slow down – as riskier assets become safer alternatives at times of financial stress. If the price rise is not tempered by global economic uncertainty, then the supply and demand of the commodity could go up too. The result could be the lowest prices for a period of time.
It is not necessarily easy to predict how much the crude oil prices will rise. Some analysts believe the situation may be similar to the price action that saw oil futures prices fall to the lowest on record earlier this year. The same thing could happen again this year. With so many uncertainties, the market may become very volatile.
The current global economy has shown some signs of growth, but in the process, some areas of the country have been hit with job losses, lower energy production and higher levels of fuel inflation. Many investors fear the global economy is no longer as robust as previously thought and may begin to slow down, affecting the commodities industry.
Some analysts argue that the recent drop in energy prices is a positive one because of the positive impact it has had on the US economy. However, other experts are less convinced that oil’s recent fall has any lasting effect on the economy. Even if it does have an effect on the overall value of the economy, experts believe that oil prices should not be expected to fall further and it will take a number of years for them to rebound.
It is also not clear how much of the rise in crude oil prices can be attributed to the global economic slowdown. Since oil is a globally traded commodity, the global price cannot be directly linked to one particular country. Also, countries can experience higher oil production, which may also affect the oil prices that they receive from suppliers around the world.
The fact remains that there is still a lot of uncertainty regarding the global economic slowdown. outlook and this could cause a variety of forces to act on the price and supply of oil.
In the end, oil prices are likely to remain stable until the end of the year or beyond. It remains to be seen how far the current global recession will last. The United States and Europe are both in need of more oil.
As more oil is produced, there is likely to be a greater demand for oil in both countries. This is one of the reasons why the price of oil is expected to remain stable.
The price of oil is closely related to the cost of crude oil and the demand for it. High demand creates a good environment for the price of crude oil. If the demand for oil is high, the cost of crude oil will be high.
With the cost of oil rising rapidly, producers of other fossil fuels, such as coal and natural gas are benefiting as well. This means that the price of oil could go up even more and stay high for some time. There are also many uncertainties concerning the future of alternative sources of energy like wind, solar and geothermal power, which have recently become more competitive.
It is a possibility that crude oil prices could be capped. This could mean that oil prices will not increase as much as previously expected and prices may remain relatively constant for a while.