How did oil prices develop in the last year?

Oil rises on stronger financial markets, expectations of extended supply cuts
Oil prices rose on Tuesday in line with firmer financial markets and bolstered by expectations that producer group OPEC and its allies will keep withholding supply.

Generally speaking, oil is one of the more volatile commodities. Prices may surge and fall fast based on geopolitical and economical occurrences. At the end of July 2018, oil was at the beginning of a price surge, the value of one barrel of Brent crude was approaching 76 dollars. The prices peaked in September 2018 when the asking price was approaching 83 dollars per barrel which was the highest price since late 2014.

However, this surge was followed by a sharp fall, oil lost more than a third of its value in just three months and at the end of 2018, a barrel was worth only 53,6 dollars. Over the next 5 months, oil started rising again, up to 72 dollars, which was followed by a sharp fall, with value of one barrel dropping by 10 dollars in just a month. Since May, prices have been more stable, with prices fluctuating in a fairly narrow band of 4 dollars.

Future developments will depend on several factors. In case of armed conflict in the straights of Hormuz, prices will probably shoot up. On the other hand, should there be a trade war between US and PRC, or perhaps US and EU (the internet tax in France is a cause for concern), then prices will drop.


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