The weak demand and mixed economic outlook have declined international oil prices this week. The current downward movement is attributed to the slow growth of China’s economy and the ongoing energy tensions and geopolitical issues in Europe and the Middle East.
Europe’s Brent crude oil, the U.S. WTI crude oil, and OPEC’s basket, all showed a significant decline. The Brent crude futures went to $73.0 a barrel with a reduction of $1.39 and the WTI (US West Texas Intermediate) is down $1.45 falling to $69.22 per barrel. Oil analysts say that crude oil now has to prove that it can break the spiral.
Insights from the Charts
After four years of the pandemic, the oil prices are still fighting its ghost in the sense that it is still surviving the after-effects of lockdowns and travel restrictions. This year everyone expected a boom but recent movements show the opposite. Let’s check the weekly and monthly insights.
- Weekly Charts: For the past two weeks, the price has been in a downward wave movement, and analysts forecast that it is going to continue. The 8.4% collapse is seen as the biggest decline this year.
- Monthly Charts: September 2024 saw a huge fall in the charts. The price tried to gain an upward momentum but drastically failed. After a small uptrend, the October chart is on a downtrend similar to what happened last month.
How Crude Oil Prices are Calculated?
Like all other commodities, crude oil price is calculated by the supply and demand. Various factors like climate change, geopolitical tensions, lockdowns, wars, and transportation affect supply and demand.
As a commodity traded globally, the rates are also determined in the global marketplace where price differences in the spot market occur according to the transportation costs and taxes regarding each country. In addition, oil can be traded in the futures market where the actual physical exchange of oil doesn’t happen.
Oil Price Forcast: The Coming Months
According to the current trends and expert opinions, the coming months are expected to be bearish, and the ongoing downward flow will continue. The demand is not increasing at all because the traders have not yet found any reasons to buy. The current level was a support line for various previous downtrends, and if it breaks further, we can see a total collapse.
The futures traders probably will shift to other assets like Gold, Silver, and cryptocurrency. Also, the emerging renewable and nuclear sources will pose a threat to the oil economy. As far as this year’s ending is concerned, the analysis shows that there is no possibility of a sudden dump. However, we can expect a gradual correction in the coming months.
Oil on the Verge of a Downfall?
According to a prominent theory, when oil was ready to replace coal as the primary source of energy, the modern oil era was born, around the beginning of the 20th century. Many energy experts expect that coal and oil will be replaced shortly by nuclear energy and other renewable energy sources.
Google’s recent partnership with Kairos Power, a company that is renowned for building nuclear energy, shows that in the next decade, affordable nuclear power sources will be accessible to the public. However various traditional analysts are of the view that oil will remain crucial even after the arrival of nuclear and renewables.
Finally, these are just predictions based on analytical data, and market sentiment can be driven by various other factors. If China’s oil demand suddenly increases contrary to popular expectations, we can see bullish signs. All eyes are on China, the world’s largest oil importer.
Iran oil revenue by year 2013- 2024
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