5 Reasons Oil Is Not Rising
The old oil bull market, the one where oil went to $140 per barrel, now feels like ancient history. Oil prices have recently been challenging lows not seen since 2012. Continuously rising oil prices not only translate to higher prices at the pump but also to higher prices of goods because of the increased production and transportation costs. But now the economy is dealing with steadily falling oil prices in recent months, which can contribute to deflation — itself a source of concern.
24/7 Wall St. wanted to focus on five key reasons the price of oil is not rising.
There are, of course, more than just five reasons for oil prices not rising. We avoided the role of currency movements, which have lately added a new curve ball — the dollar has rallied against major currencies, and oil is priced in dollars. Another factor we have not explored is Iran. If Iran’s energy infrastructure comes back online in full, this could further add to downward pressures on oil prices.
Recent global news might make one think oil prices would have been set to shoot much higher. Despite the rise of ISIL in Iraq and Syria, and despite all the sanctions that were placed on Russia for its role in the Ukraine skirmishes and the annexation of Crimea, the price of oil has been on a steady decline. Here are five reasons you shouldn’t expect oil to rise.