Why did the international oil price plummet?


The reason for the sharp drop of international oil price? The exchange rate of US dollar is also one of the important factors influencing the sharp drop of oil price.

Generally, in the spot crude oil market, there is a rule that if the US dollar rises, the oil price falls; if the US dollar falls, the oil price rises. The strength of the US dollar generally represents a good domestic economic situation in the United States. Domestic stocks and bonds in the United States will be sought after by investors. The function of spot crude oil as a means of value storage is weakened. However, the decline of US dollar exchange rate is often related to inflation and stock market downturn, and the hedging function of spot crude oil is reflected again. This is because the depreciation of the US dollar is often related to inflation, while the value of spot crude oil is relatively high. When the US dollar depreciates and inflation intensifies, it will stimulate the maintenance of the value of spot crude oil and the rise of speculative demand.

The monetary policies of various countries are closely related to the causes of oil price slump.

When a country adopts a loose monetary policy, due to the decrease of interest rate, the money supply of the country increases, which increases the possibility of inflation, which will lead to the rise of spot crude oil price.

The above is part of the situation that has an impact on the rise and fall of oil prices. How to judge the rise and fall of the market? After joining the firm offer, we will have a professional trading master to teach you how to deal with the market.

Was this article helpful?

0 out of 0 found this helpful