Impact of Covid 19 on Crude Oil Prices

By

At present, lock down prevails in most part of the world.As soon as lock down ends,financial markets will start afresh. Crude oil prices for the first time in history becomes US $0 per barrel. The price of WTI (West Texas Intermediate) crude futures contract of May expiry were negative US$39 per barrel on the New York Mercantile Exchange on April 20, 2020. Brent crude oil prices too followed the same track. There  were large production cut by the OPEC+ countries.But unfortunately, there stiff action does not increase the crude oil prices.

 

Following are the reasons for free fall in crude oil prices:

 

1. There is very little demand of crude oil all over the world and the supply of crude oil is very high. Moreover, there is economic uncertainty and hence there is a free fall in domestic and external demand of crude oil.

 

2. Global trade, both export and import, reduces to a great extent. Consequently, there is a fall in production.

 

3. Even OPEC+ nations, particularly Russia, have not agreed to cut production of crude oil. This also increases the supply of crude in world market as well.

 

Impact on world economy

 

The global economy will fall into slow down. As most of the nations storage capacity is full, nations are less likely to purchase crude from OPEC+ nations which in turn will decrease the price of crude further and remain stayed for longer period of time.

 

Future of oil markets scenario

 

There is a prediction from United States Energy Information Administration that from July to September 2020, the average crude oil price will be at least $24 US per barrel. From September 2020 on wards, it will definitely increase to $30 US per barrel. Hence the average price for the year 2020 will be $33 US per barrel. For the year 2021, there will be a rise in the price to at least $46US per barrel.United States Energy Information Administration further predicts that by the end of 2025, the crude oil price will hover around $80 US per barrel.Global demand for crude will also rise. People all over the world will search for some other alternative owing to the fact that there is a probability that crude oil will not left behind globally by 2050 and moreover, the market price will be very high, still not affordable by many poor nations.

 

 


Comments

Post a Comment

Popular posts from this blog

Teacher As: Critical Pedagogue

By
Education is not only a process of cognitive development. It is a process of overall development of the child. The whole teaching learning process consist with three important components i.e student, teacher and curriculum. In the process of curriculum construction, evaluation and feedbacks are an important aspect to redesign the curriculum. Evaluation cannot be made on the basis of academic achievement of the students. Teacher should play an important role in the construction of curriculum as well as transaction of curriculum. Thus there is a need that teacher should take initiative to evaluate the whole education system as a Critical pedagogue. It is an ability to evaluate our teaching and the practices prevailing in existing education system critically in relation to methods and practices adopted by the teacher to teach concern pedagogical subjects. Ira Shor defines “ Critical pedagogy is habits of thought, reading, writing and speaking which go beneath surface meaning, first impr
Read more

ROLE CONFLICT PROBLEM AMONG WORKING WOMEN

By
Women of India have marked their significant presence in the world in various fields. They have been given the status of power and prestige in India.    Indian women has got much more significance in today’s developing times. Where until lately, they were shadowed by patriarchal dominance, the contemporary women in India have moved beyond all social boundaries to emerge as triumphant leaders of tomorrow. Not only has She taken up courageous roles in society, her own individuality as a ‘woman’ has now got an improvised meaning. The world has changed for females in India now. The daughters are pursuing successful ambitions in the male dominated corporate scenario and mothers are taking up flextime jobs to showcase their exceptional managerial talent. Today, our women have stepped out to become bread earners of the family. Although the trend is yet developing in India, The IT-BPO sector is becoming a female dominated industry in India with a significant number of capable and qualified f
Read more

Rights and obligations of Issuer, Participant and Beneficial owner under the Depository Act, 1996

By
As per section 17 of depository Act the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations. Under the Depository Act, 1996 depository means a company formed and registered under the Companies Act, 1956, and which has been granted a certificate of registration by SEBI under sub-section (1A) of Section 12 of the Securities and Exchange Board of India Act, 1992 ). (Section 2(1) (e)) Work of Depository- The word ‘depositary’ is defined as “the party of the institution (company) receiving a deposit. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities. It acts as a trustee of the owner since the securities are entrusted with him in trust. He is also the agent of the owner of the securities. Thus
Read more