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Crude Investing News reports oil prices and its impact around the world. There are three catalysts for higher oil prices. Many analysts believe that oil prices will rise in the long-run for a number of reasons. Firstly, several developing countries are beginning to see an improvement in gross domestic product per capita, and as a …
Crude Investing News reports oil prices and its impact around the world.
There are three catalysts for higher oil prices. Many analysts believe that oil prices will rise in the long-run for a number of reasons. Firstly, several developing countries are beginning to see an improvement in gross domestic product per capita, and as a result, more demand for automobiles and oil-supported infrastructure. For example, China’s auto industry grew 351 per cent since the turn of the millennium in 2000.
A second catalyst for an increase in oil prices over the long-run is the strong possibility of inflation in the United States. After all, an increase in the money supply currently being to support economic stimulus packages is expected to produce inflation over the long-run, which will lead to an increase in prices as oil barrels as they are denominated in US dollars.
Finally, instability in the Middle East is another major factor behind a rise in oil prices. Conflict-ridden countries like Iran and Iraq control a large amount of the world’s oil supply, while the OPEC cartel is beginning to improve its control over supply to meet its desired pricing. With more trading regulations, it is likely that these prices will be even more sustainable.
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