In the last 12 to 15 months a lot has changed (visibly) in the world markets. Oil, one of the precious commodity and once thought as a safe asset has shown close to 90% downfall from their peak prices .This shows , just how quickly the numbers can change in globalised and interdependent market.
Ever imagined what’s causing this ? I guess few people must be knowing but let me simplify this.
In recent years , USA has seen more than 100% surge in their domestic oil exploration , new gas fields explored in the USA have forced gulf and African exporters to shift their exports to none other than the ASIAN continent.
Asia has Been a large importer of oil and gas and is an important market for world oil exporters. but due to cut in demand from the USA the companies were forced to cut down the oil prices in order to stay in the competion for a market which now has ample supply but limited demand.
By the law of economics prices had to correct in order to achieve equilibrium. The prices kept on correcting as the competion is now more fierce ever since IRAN has started its oil exports , post lifting of the sanctions on them.
An estimated 3,00,000 people lost their jobs as the oil exploration projects are cut down drastically.
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Steel – Being updated – visit soon 😉