Oil Price lives up to its Volatile Reputation
June 25, 2020 (Investorideas.com Newswire) Oil prices have a reputation to be volatile. The past few months showed how volatile the commodity can be. At the start of March, West Texas Intermediate (WTI) crude oil prices hovered above $45 per barrel. In two months, prices dropped to $20 per barrel, went negative, and came back up to $35 per barrel.
The original disagreement during an Organization of the Petroleum Exporting Countries (OPEC) meeting caused the initial price drop to $30 per barrel in March. Russia refused to cut oil production, and Saudi Arabia responded with an oil price war. The United States went into coronavirus (COVID-19) lockdown and led to a drop in oil demand. In April, OPEC came to an agreement to cut production, but the damage was done. The lockdown created another gap for oil demand in the US, and prices crashed. On April 20th, the price of WTI was -$37 per barrel, going negative for the first time in history. China showing signs of oil demand along with OPEC's production cuts, drove WTI to $35 per barrel by June.
Oil prices fluctuate every day depending on supply and demand. Within the last few months, world leaders in the industry and COVID-19 showed the world how volatile oil prices are. Oil price has a reputation of volatility, and it is living up to its name.
By: Vincent Lau
Email: vince@petrofly.com
Website: https://petrofly.com/
Linkedin: https://www.linkedin.com/in/vincent-lau-19a3a151/
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