Falling oil prices and impacts on socio-economic development
Abstract
World oil prices started their declining trend in June 2014 which continues with a faster pace with the price of Brent crude dropping from USD 110/barrel to USD 45.22/barrel on 13 January 2015. The fall in oil prices has strongly affected the economies of different countries as well as the development of oil and gas companies around the world. In this paper, the author analysed the causes of the falling trend of oil prices and its impacts on the economy, and forecast the developments of oil prices in the coming period.
Oil and gas are strategic commodities and could even serve as an effective weapon. Oil prices have never been stable in the history but frequently fluctuate and are very unpredictable. Any change in the world (whether in production and economy or in the financial-fiscal, security and geopolitical fields) can affect oil prices. In general, oil prices are dependent on 3 main factors: the relationship between demand and supply in the market; the interests of groups of nations; and political factors. In addition, there are other irregular factors such as war and natural disasters. So, what are the reasons for the decline in oil prices this time?
References
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