Why did oil become more expensive? – Trade News

According to Trade News, in the past decades, various factors have affected the price of oil and fluctuations in this market. These include 9/11, Hurricane Katrina, the financial crisis in the United States and Europe, and the decline in OPEC oil production, which have led to different price changes in the market over the years.

But the events of 2020 and the negative growth rate of the world at the same time as the fall in oil prices, has been an unprecedented event in this market and will not be erased from the memory of this market.

“During the oil price trend last year, many factors had an impact, but there are three main factors that have a greater impact and It has put more importance on oil price fluctuations.

He added: “One of the main reasons for the increase in oil prices is the optimism that has been created after the discovery of the Corona vaccine. If we look at the statistics of world growth rate, we see that the whole world and the industrialized countries had negative growth rates, except for China, which is the birthplace of the virus, and its growth rate was positive during the outbreak of the disease. The decline in the growth rate of industrialized countries caused the world average growth rate in 2020 to be negative.

“One of the most important and influential factors in this situation was the beginning of the outbreak of the Corona virus, which created a vague outlook for the world,” said the energy economist.

“Corona was one of the most important and effective factors in reducing the growth rate of the world economy,” he said. In 2021, hopes for vaccine control and control led to an optimism that the world growth rate would improve, which in turn boosted demand for crude oil. Go positive and good.

“In 2020, even US oil prices fell below zero,” Asadi said. But this year, compared to last year, we saw a rise in prices in this market, which I think was one of the most important factors in controlling the virus and global vaccination.

He added: “Another factor that is contributing to the increase in crude oil prices, in my opinion, is the environmental policies adopted by US President Biden. The return of the United States to commitments, including emissions commitments that have led to a rethinking of US plans and shale oil production, is part of the new US administration’s policies.

The energy economist continued: “Shale is one of the most important and influential factors in the United States becoming a global exporter of oil, and on the other hand, the discussion of controlling and preventing the development of shale extraction activities has created a market outlook that a The amount of shale oil production is also removed from the market and there is less supply.

He added: “The third factor that always affects oil price fluctuations is the decisions of OPEC and the agreements reached between OPEC and OPEC Plus, and the commitments made to reduce crude oil production in the main supplier countries cause a relative balance in supply.” And demand and rising crude oil prices.