Over the last few years, crude oil prices have been anything but stable, but what’s really driving this volatile trend? It’s time to take a closer look. In this article, we’ll be analyzing the different factors that have affected the crude oil price trend and how this trend may develop in the future.
The trend of crude oil prices has been changing over time. Recently a rise in oil prices has been observed due to an increase in demand. A number of factors play a role in determining the price of oil, such as the cost of production, government regulations, supply and demand, and investments in infrastructure among others.
The global supply of crude oil ihas been declining since early 2019, this is mainly due to the continuous increase of crude oil production in the US and OPEC countries. Also, a major influence on oil prices is the US dollar; when the dollar is strong this leads to cheaper oil prices, and vice versa. There are a number of other factors that can impact the price of crude oil in the short-term such as geopolitical effects, economic data release, and weather.
- Production cost: This can be influenced by the availability and cost of fuel, labor, and materials needed to produce crude oil.
- Government regulations: Government policies such as import taxes, export restrictions, emission policies, and subsidies can all influence the price of oil.
- Supply and demand: This plays a huge role in the price of oil; the demand for oil by consumers is the major factor that determines oil prices.
- Investments in infrastructure: As more money is invested in infrastructure to increase the production of oil, the supply of oil can become more readily available, and prices can be lowered.
As the global demand for energy continues to rise, the price of crude oil is likely to remain on a volatile path. While the market may remain unpredictable, taking a closer look at the crude oil price trend can give valuable insights, allowing investors to make informed decisions.