If you happen to be a newcomer to oil investment, you’re very likely wondering about diverse variables that can affect the oil prices. Knowing about these issues is very imperative for an investor as it encourages them to take key decisions at the right time. Oil prices are enormously fluctuating and there are both domestic and international components that can affect oil investment prices.
Organizations, Supply and Demand
OPEC - Organization of the Petroleum Exporting Countries - is an international organization that controls the price of crude oil. They come up with a flat price per barrel based on supply and demand. If large oil wells are founded in the United States, it can have an immediate impression on your portfolio however such occurrences are not very frequent.
Natural Disasters and Manmade Disasters
Both natural and man-made disasters can have grim influence on oil prices and one good representation is Hurricane Katrina which halted oil production in the entire Southern Gulf Coast of the United States. The immediate result was substantial raises in crude oil prices but it affected the Texas oil market in mixed ways. Similarly, conflict in the Middle East or political issues in different parts of the world can substantially change oil prices. We witnessed such a situation when the Iraq War to dethrone Saddam Hussein was begun.
Why Would An Investor Monitor Oil Prices?
The beneficial thing about oil investment is that most crises are in the investor’s favor and the only exception was Hurricane Katrina which halted crude oil production but in any other case, only the demand speeds up and the prices goes up, helping the investor make better profits. By continuously monitoring news of crude oil, natural gas and other petroleum products, you will rapidly master how to predict the market.
It’s not possible for anyone to predict the market with 100% accuracy on a regular basis but it is very much possible to yield a fantastic income with periodic predictions.