Oil price is up suddenly. Good news or bad news?
I know, if we drive cars, we simply hate it when petrol prices go up. However, rising petrol prices do signal something positive in the world economy yeah. Unless of course, all these prices going up was triggered by speculation and speculation alone. Haha. Yes, there are a lot of speculation at play when it comes to oil price yeah.
When people EXPECT demand to move up, the prices move up FIRST. Note, they expect does not mean demand has already risen to a level warranting the price increase yet. It’s the potential future demand which people expect which is driving up the prices instead. Yes, this is why oil prices (which will impact petrol prices) has risen to a new high. This is the highest in three years which is really high…
Article in nst.com.my The price of Brent crude oil jumped Tuesday above US$80 for the first time in almost three years on expectations for surging demand and concerns about supplies as the world slowly emerges from the pandemic crisis.
With the rollout of vaccines and easing of lockdowns this year, bets on demand for the black gold have surged, while an energy crunch in the northern hemisphere has sent natural gas prices to a seven-year high leading to a spillover into the oil market.
At the same time crude stockpiles have shrunk, while increases in output by OPEC and other major producers including Russia have been unable to temper the rally in the commodity. Please do read the full article with a lot more details here: Article in nst.com.my