The U.S. Energy Information Agency says that global oil producers will see crude oil prices moderating in 2014. The organization believes that crude oil prices have been relatively stable in the past few years and the last year has shown that there won’t be much decline. For instance, the price of West Texas Intermediate crude oil has averaged about $95 per barrel.
Last Friday the price of oil slipped closer to $95 a barrel after dropping 3 percent. This happened as the dollar is strengthening and there is a lot of concern about global oil supply as rebels has again captured some oil wells in Libya. Amidst concerns, the benchmark U.S. oil contract for February delivery was down 20 cents to $95.24 a barrel in electronic trading on the New York Mercantile Exchange.
According to market observers whenever dollar strengthens commodities lose their sheen and the same was visible in crude prices. The expensive dollar deters buyers using other currencies and the demand diminishes for crude or other commodities for that matter. However, as the U.S. Energy Information Agency says, the market will be stable throughout, investors may calm for a moment.
An Outlook to the Crude Oil Market in 2014
Market observers see and this portal has also reported this earlier that in 2014 the U.S. will further increase its crude production and that will be a major boost for global oil supply. This according to some analysts will provide the much needed oil and respite for the countries that are heavily dependent on the Gulf oil. However, some analysts believe that this is also a reason the WTI index is low.
On the other hand, most analysts agree that Brent crude oil prices will fall in 2014 as according to them some major oil producers like Iran and Libya will start contributing to a great extent which will further add up to the oil supply and due to lack of demand and increase in supply, the crude prices may go further down.
However, it is to be noted that lower oil prices are not bad for some economies like that of China and India which import a significant part. In fact, China is the largest importer of crude oil, and will see a further increase in demand. India is already facing a lot of challenges, as its economy depends a lot on imported oil wherein it is shedding a lot of its Forex reserve.
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