One of the main issues of the world economy in 2015 is when oil prices will go up, which are very low now, writes one of the leading internet energy portals OilPrice.com.
OilPrice believes in the near future oil price will be determined by five key factors.
Chinese economy exerts a very strong influence on fluctuation of oil prices. China is the world second biggest oil consumer and in 2013 it outrun the US on the volume of liquid fuel import.
The oil prices also depend on how actively demand in fuel will be increased in China.
According to the estimates of the US Energy Information Agency (EIA), it is expected that by 2020 China will consume 3 billion barrels a day more, than in 2012. But in 2014 China showed poor results and in the near future the world will closely watch if China will be able to affect the slowing pace of economic development, writes the article.
The second factor is development of shale oil in the US. Oversaturation of the oil market and a sharp reduction of prices has been provoked by increase in oil production in the US by 80% since 2007. By the end of 2014 US extracted 9 million barrels of oil a day. The US companies “have shot themselves in the foot” and in 2015 the entire world will see if the oilmen are able to maintain the volume of production and this will affect the oil prices, writes OilPrice.com.
The thid factor is flexibility of the demand, which demonstrates reaction of the consumers on change of oil pruces. As “low price is the medicine of low prices”, one cannot rule out that they will cause growth of fuel consumption in many countries and this will lead to increase in oil price, believes OilPric.com.
A lot will depend on the decisions to be made by OPEC in the near future, because the current situation with the oil prices has been caused by refusal of the OPEC member-states, including Saudi Arabia, to reduce the volume of production in November 2014. Despite the criticism of OPEC, one should admit that influence of OPEC on the prices is extremely serious.
One should also take into consideration various sources of geopolitical tension. Just recently even insignificant irregularity of oil export in one exporting counry could cause change of oil prices. But in early 2014 oil prices increased, because of disturbances in Libya and destabilization of situation in Iraq by the Islamic State (IS), but the armed clashes in Libya at the end of 2014 did not seriously affect the world oil market. Meanwhile, the practice shows that geopolitical conflicts are among the most powerful short-term factors affecting price of oil, reported OilPrice.com.
