During the past two years, oil, along with many other raw material commodities which are used to produce energy products, has been very volatile.
Perhaps given the nature of its supply, which is largely in the hands of the OPEC+ countries whose national economies depend on the export of oil around the world, the 'oil cartel' has a lot of bargaining power over its consumers, hence in times of economic strife or geopolitical instability, oil prices have always been ones to watch.
First of all there was supply chain and logistical curtailment due to lockdowns across many Western countries, which led to the increase in the price of oil during 2020 and 2021, and then the sanctioning of the settlement accounts of Russian oil companies by European governments which led to any oil bought having to be settled in Rubles in bank accounts in Moscow, leading to rapidly accelerating ruble prices and oil supply constraints for European customers.
Therefore, oil prices have been high for 2 years, however this morning during the Asian trading session, Brent Crude Oil (WTI) took a dive in value and by 8.45am UK time, it was languishing at $76.92 per barrel, a steep drop over yesterday's values and a very noticeable drop compared to this time last week when the value was $82.27 per barrel on January 23, its highest value this month.
During the past 30 days, Brent Crude Oil has been very volatile in its values, having begun the month at a low point of $73.08 on January 4, before accelerating past the $80 mark by mid January, then retracting again before heading back to the high of over $82 last week, and now it is back down to the mid-$70s again.
Despite the overall rollercoaster ride of volatility this month, Brent Crude Oil is down overall by 4.3% during the past 30 days.
This has been an interesting period for commodities traders, and whilst in many Western markets, gasoline prices are now far lower than they were six months ago, the price of crude oil continues to fluctuate considerably.
In some cases, vehicle fuel prices at the pumps on the retail market have decreased by over 50p (British) or 50c (Euro) per liter in six months. For example, in July 2022, motorists in the United Kingdom were paying approximately £1.99 per liter, now unleaded fuel is readily available at around £1.50 per liter, and in France, in July 2022 unleaded fuel was retailing at an extremely high 2.20 Euros per liter, whereas during January 2023 it has been selling at anywhere between 1.70 and 1.87 Euros per liter.
Volatility is the the lifeblood of trading, so says the old adage, and the oil price this month has certainly been on point in this respect.
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