It has been an unpredictable week for the oil industry and the future will be more unpredictable than before. The international benchmark Brent crude has toppled nearly 9 percent since last week. Its recent dip in the market is a result of higher oil production from Saudi Arabia and other members of the Middle East cartel and leading economies of the world such as Russia and the U.S. In addition, the political and economic motives are also shaping the oil prices.
The Fluctuations In The Oil Business
The amount of uncertainties in the oil market has increased in the past few weeks, making it world’s unpredictable commodity. It has reported that Saudi Arabia enflamed crude shipments to the global market by about 400,000 to 7.6 million barrels a day in June. On the other hand, the U.S.
Energy Information Administration (EIA) stated that America’s oil output increased beyond 11 million barrels per day for the first time. Such rapid and unexpected increase in the global import-export has resulted in making the oil industry the most volatile trade in the world.
As reported by CNBC, senior analyst at PVM Oil Associates stated, “Political and economic events are leading the oil market in such a way that they have not shaped for quite some time. In addition, the number of uncertainties regarding the global supply and demand equation is growing day by day.” To make matters worse, the U.S. President, Donald Trump has sanctioned several countries to break their tie-ups with Iran and stop importing oil from the country before the start of November. Thus, the oil industry is expected to suffer for the next couple of months until the Iranian export issue settles down. However, several investors still believe that the recent dip in crude shows a golden opportunity as the U.S. sanctions against Iran and other supply commotions will trigger a fear of supply crunch.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]