On board the oil price roller-coaster
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It is no news that commodity prices are volatile and unpredictable. Countries which are dependent on the extraction of natural resources have their faith linked to the price of a particular commodity or a group of commodities. The end result of a shock in thOn board the oil price roller-coaster
It is no news that commodity prices are volatile and unpredictable. Countries which are dependent on the extraction of natural resources have their faith linked to the price of a particular commodity or a group of commodities. The end result of a shock in the price of a commodity is usually adversity across the producing nation and its citizens. The opposite holds true when commodity prices trade at high levels for long. The price of oil was a case in point during the first decade of the 21st century when resource-rich countries benefitted from high commodity prices. During this period brent crude oil reached a high of nearly $144 in 2008. During the last 10 years the price of oil was not as benign. Brent crude oil has been on a roller-coaster since the last financial crisis, during which the price of oil tumbled, as oil traders expected demand to decline on recessionary fears. Since then it recovered ground and back in June 2014 brent crude traded at $115 a barrel but again hit a multi-year low in early 2016 as it hovered around the $30 level. The sharp sell-off came on the back of global growth worries and at a time when global demand was due to turn negative. However, over... Read more