Crude Oil Prices rise on hopes of US to emerge from nearly two months of prolonged closure, November is historically a leading month for the global market. This is because December is also considered to be a strong month for buyers of crude oil and gasoline.
The rise in oil prices this year is due to the increasing demand to meet with the rising demand by domestic producers and exporters. Imports from other countries are balanced by exports.
There is an estimated modest increase in both imports and exports in December because of the end of US government shutdown. Imports from the United States will have to deal with various problems such as fuel shortages at all US domestic ports.
The international oil companies are already restricting their refining capacity due to the lack of supplies coming in from overseas importers and exporters. Reduced domestic crude oil stocks are likely to lead to continued price increases until exports get back to normal levels in late December.
It is expected that oil prices will continue to rise until early January due to concerns over the economic situation in Europe and Asia. The weaker European economies will most likely experience significant growth in fuel consumption in the coming months. Therefore, traders could expect an increase in US crude oil prices in the next couple of months as European importers and exporters try to balance their budgets to make up for the reductions in fuel prices.
It is obvious that the increasing demand for crude oil and gasoline is being influenced by the Chinese government’s commitment to be the world’s top consumer of energy. China’s future energy supplies will be directly affected by the efforts of China to reduce its own dependence on imported crude oil and gasoline.
The demand for these commodities has also been stimulated by China’s role as the leading economy of the Asian continent. With regard to China’s approach to economic development, it is obvious that they will aim to make the most of its oil reserves and oil transportation resources to produce more electricity and to provide industrial goods to the rest of the world. Because of this, the Chinese government has recently approved a more aggressive program for the exploration of oil and gas resources in China’s coastal areas.
Despite predictions of a rise in oil prices in the near future, some analysts have predicted that crude oil prices will stay stable throughout 2020 and that it will increase only by the end of the year. Many traders are expecting a price rise because of the long term trend of increasing demand. In the upcoming months, we are likely to see volatility in the markets due to different global events.
Some traders are predicting that the number of oil producing countries will increase until the end of 2020 and that domestic production will come down due to insufficient supply. On the other hand, if these predictions are met, the amount of crude oil produced by the United States will decline.
The problem with crude oil prices is that they cannot be predicted precisely. What is predictable is the large demand for gasoline and petroleum products around the world, but supply and demand are two very different concepts.
Developing countries’ increasing dependence on crude oil for domestic supplies may decrease demand for gasoline in Europe and Asian countries. This is because the developed countries will take up less of the worldwide demand for petroleum products.
Crude oil prices rise on hopes of US to emerge from near two months of closure, November is historically a leading month for the global market. This is because December is also considered to be a strong month for buyers of crude oil and gasoline.