Price drop of crude oil Essay Example | Topics and Well Written Essays - 500 words

Price drop of crude petroleum color - Essay ExampleIn addition, several deals that the States has made with war-torn vegetable oil-producing countries. The art article addresses the factors mentioned above.The quantity of crude futures declined in the recent past on concerns that the global oversupply is hurriedly filling oil stocks. Total petroleum product in the year 2015 is expected to go up to 9.35 one thousand million barrels every day. The quantity is slightly more than the 9.3 million barrels daily forecast in the previous period, the Energy Information Administration (EIA) highlighted run short week in its monthly short-term energy outlook. Independently, oil stocks went up more than anticipated marking the several consecutive week of a higher overall than at any other time for the last 80 years and more. The American commercial crude oil stocks rose by approximately 4.5 million barrels from the previous week the EIA said Wednesday. some other reason weighing on oil cha rge is the OPEC policies on the export of crude oil to the global market. As a result, the American oil output could be adversely affected in the recent years due to low oil prices offered by the OPEC countries. In addition, OPEC also outlines that the lower global oil prices may have affected the marginal barrel output from other sources, such as shale. The OPEC is a significant body in the oil industry. Therefore, its decisions and selling affects trade in crude oil because it controls a large percentage of the worlds fuel production. As such, any decision that they make straight off affects the market prices of the commodity (Why the oil price is falling , 2014).In this case, the petroleum trading block may take actions targeting their competitors in order to establish agnise control of a larger market. Such activities may include flooding the market with the commodity leading to market forces coming into play and hence price decline.