Image by Barrybar via Flickr It was less than a month ago where I wrote an article about oil and why (based on analyst’s opinions) the price has increased so much, going up to $147 per barrel back in July. You gotta love the stock market, including mutual funds and commodities, because they never cease to amaze or surprise anyone. In just four short weeks, oil has come down to under $108 per barrel. How in the world does oil spike up so quickly? More importantly, how does it plummet so drastically? Oil prices have decreased over 25% in the last four weeks, which makes me laugh when I think about all of those big shots from Goldman Sachs and such who predicted that oil will hit $200 by the end of summer. If you want to find some of these articles, simply go to www.104oil.com and you’ll find hundreds of them and others that are related.
The thing that I get tired of is the amount of speculation there is about oil, with “experts” giving their “expert opinions” on things. There are many reasons (based on analyst’s opinions from articles I found on 104Oil.com) as to why the price of oil has decreased so much. The economy of “powerful” countries, such as China, is weak and in jeopardy of a recession. Demand for materials and other goods have decreased due to these countries having weak economies and reducing their output. Furthermore, specifically with China, the currency there has increased in value, which obviously makes exports less desirable, hence, causing a decrease in the output of products. Yet, the average person would conclude that if a county’s currency appreciates in value, why would it be having economical problems? For that, stay tuned for another article…we’re talking about oil here.
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