In this
article it discussed how the price of oil is slowly recovering and rising. Just
in the past week oil prices have risen by 8%. In addition the article also
discussed some of the federal reserves plans for the future and how it will affect
the price of oil.
President
William Dudley of the Federal Reserve Bank of New York said he favors a go-slow approach
to raising the central bank’s short-term interest rate target. He says that by
keeping interest rates stable it could do the same for the dollar or weaken it.
With a weaker dollar it will result in higher prices for oil.
Due to the possible changes the fed may take, many oil
traders have been keeping a close eye on the actions of the Fed. Furthermore
the article talked about how many countries are beginning to slow down
production to cut back the supply, which will in turn raise prices.
http://www.wsj.com/articles/oil-prices-lifted-by-fed-comments-on-u-s-economy-1460106999
Like you mentioned oil production is really high right now, and prices won't level out until the supply is tightened a little bit. The Fed can do all they want, but until countries decide to produce a little less prices will stay where they're at.
ReplyDeleteI am glad the price of oil is rising as it will certainly have an effect on the the manufacturing sector. If the price of oil rises, the prices of durable good will rise as well. It is good for the world economy that many countries are cutting back production.
ReplyDeleteAs a consumer I am not happy that the price of oil is rising because this will lead to increased gas prices. However, oil prices rising is a good stimulant for the economy. I do believe that the U.S. needs to keep a strong dollar. I am not surprised that countries are going to be cutting back the supply of oil to raise prices after all, corporations need to maximize revenue.
ReplyDeleteThis article touches on a main current issue that is going on throughout the world, regarding oil prices. What this issue comes back to is what Saudi Arabia is doing with the other countries of OPEC. While they try to drive out competition, they are keeping their oil prices low so other countries will lower production, which we have seen in countries such as Russia and the US. Saudi Arabia is doing this to keep their share of the market. What is going to be a big factor is how long Saudi Arabia can hold out with these prices, because by them doing this, it is also destroying their economy, but can afford it from reserves they have built up over the years. It will be interesting to see how the changes of oil prices will move in the upcoming future, and how these prices will effect economies throughout the world.
ReplyDelete