The recent crude oil price pullback has sent shock waves all over the world. The consequences of such a move are expected to affect the economies of many nations. The sudden and sharp fall in crude oil prices has made many wonder whether this is the beginning of the end for the use of fossil fuels. If so, what comes next? The following scenarios suggest some possible answers.
The most likely scenario is that the price of crude oil will be driven up once again once the shock of the recent crude oil price pullback settles down. Many believe that the market will become bearish (not bullish) once the shock of the price pullback subsides. This would mean that traders should buy cheaper oil (USD/ Brent) as the prices start climbing once again. In the past, traders have been waiting for an upside in the market before buying higher, however, this could also mean that investors will begin buying lower (USD/LTC).
However, this scenario may not last long. There is no guarantee of this, though there is a chance that the prices will fall further. Traders can only wait and watch as the situation plays out in the market. Some believe that the price of crude oil will continue to go up for quite some time, though others are not so sure. There are other factors affecting the rise of oil prices that investors and traders need to understand.
One of the main factors contributing to the rise in crude oil prices is the US economy. Analysts believe that the US Federal Reserve will raise interest rates once it begins its second term as the central bank. This will further add pressure on oil companies to pump more oil into the market, thus driving up crude oil prices even further. Another contributing factor to the rise in oil prices is the increasing tension between Iran and the Western world over the Iranian enrichment of crude oil.
Another possible factor that will result in an increase in crude oil prices is worldwide demand for oil. As more countries become more self-sufficient in producing oil and gas, the demand for oil will also increase, and this will lead to an upward trend in the prices of crude oil. If this happens, then investors would be in for a rude awakening when the price pullback occurs, but if this does happen, the prices of crude oil will likely not fall below the current levels. If the situation between Iran and the West worsens, then there is a good chance that oil prices will continue their upward climb until they return to previous levels.
Although these factors are unlikely to have any significant impact on the global economy, investors and traders should continue to monitor the situation carefully. Oil prices are highly influenced by various factors around the world. It is therefore important for traders and investors to closely watch news reports from various parts of the world in order to understand what may be causing price increases or decreases in crude oil. The price pullback may not occur immediately, but with time it will eventually happen. This will be a very good time for investors and traders to start buying stocks in anticipation of further price increases in the future.