GLOBAL CRUDE OIL TACTICS

GLOBAL CRUDE OIL TACTICS

All over the world oil crude oil prices are falling and keep falling. It seems that acchhe din have been started all over the world. People are very happy specially in India(ACCHHE DIN). But it is a serious matter for global oil producers. Despite of their will they are not able to curb the falling oil prices. We will now see what are the cause of the sharp decline in oil prices

• First and very simple reason is the demand for crude oil is low because of poor and weak global economic activities
• There is an increase in efficiency in economic activities all over the world which results in less wastage. Believe it or not but it is one of the reasons of fall in oil prices
• A movement all over the world to switch over to non conventional sources of energy like solar, biogas and wind energy.
• United states of America which was the biggest importer of the world, now has become the biggest producer of Oil, which resulted in decline in demand of oil
• Shale gas production in United states of America has made it less dependent on Oil.
• Due to decline in the demand, OPEC (Organization of Petroleum Exporting Countries), Countries considered the option of lowering the production, but it will result in the further loss of revenue. It will also benefit the countries like Russia, Iran and Venezuela which will not subsequently lower the production in lure of selling at lower prices. Specially Saudi Arab is against the lowering of production.

Oil market was funded by Federal Reserves cheap money in Quantitative Easing program, with zero rate of interest. which may have resulted in an upward trend of oil prices. But after winding up the Quantitative Easing Program, interest rates started increasing which may have resulted in falling in oil prices.

Experts have predicted that the oil prices will be at lower side for one year or more and it may decline further. +OPEC Multimedia