The Sand Bunker

Just another Blog by anDru

Drop in crude oil price

The crude oil dropped a USD69 a barrel today, a level that is about half to historical high of USD148 a few months ago. The world was in a great panic with the scary high oil price and once again we are in panic as the oil start it’s free fall to a level we would never have predicted. Now the next question is how low can it coming down.

Many people would welcome a cheaper oil price as it would mean people can travel go back to the normal life. Things will eventually become cheaper as less cost will be needed to produce or transport them.

But on the other hand, if oil price keep on coming down, it only translate to the sluggish economy we are already in. Cheaper oil mean no demand and no demand mean no work and this will put a break to the economy. many industries are currently suffering from business losses amounting to millions of dollars due to declining oil price. Many are still holding high oil inventory or contract but will caught not able to sell their product as the it would mean selling at a loss. Buy high sell low.

The oil could go down as far as USD50 per barrel and when that happen, we just have no idea what is going to happen to our industries.

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