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Oil price is up suddenly. Good news or bad news?

oil price

Oil price is up suddenly. Good news or bad news?

I know, if we drive cars, we simply hate it when petrol prices go up. However, rising petrol prices do signal something positive in the world economy yeah. Unless of course, all these prices going up was triggered by speculation and speculation alone. Haha. Yes, there are a lot of speculation at play when it comes to oil price yeah.

When people EXPECT demand to move up, the prices move up FIRST. Note, they expect does not mean demand has already risen to a level warranting the price increase yet. It’s the potential future demand which people expect which is driving up the prices instead. Yes, this is why oil prices (which will impact petrol prices) has risen to a new high. This is the highest in three years which is really high…

Article in nst.com.my The price of Brent crude oil jumped Tuesday above US$80 for the first time in almost three years on expectations for surging demand and concerns about supplies as the world slowly emerges from the pandemic crisis.

With the rollout of vaccines and easing of lockdowns this year, bets on demand for the black gold have surged, while an energy crunch in the northern hemisphere has sent natural gas prices to a seven-year high leading to a spillover into the oil market.

At the same time crude stockpiles have shrunk, while increases in output by OPEC and other major producers including Russia have been unable to temper the rally in the commodity. Please do read the full article with a lot more details here: Article in nst.com.my

Okay, it’s going to be bad news with the petrol price soon

If world oil price goes up, then the petrol price will be going up in-tandem too. What this may lead to would be inflation since cost of transportation will go up when petrol prices go up. So, petrol price will lead to prices of many other things to go up too. Let’s just hope that our economy recovers even faster, people have more incomes and that covers the cost increase from petrol price versus stagnating income and rising prices. Continue to stay safe, mask on and inter-state travel is not yet allowed. Please do not try even if you may not get caught.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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