WTI (NYMEX) Price
End of day Commodity Futures Price Quotes for Crude Oil WTI (NYMEX)
By late 2014, world oil supply was on track to rise much higher than actual demand, as the chart above from Nasdaq shows. And, in september, prices started falling sharply. As prices dropped, many viewers waited to see whether OPEC, the world’s largest oil cartel, would cut back on its production to help it survive. (On the other hand, Many OPEC states, like Saudi Arabia and Iran, need high prices to balance their budgets). However, OPEC did nothing. For me, the behind reason doing nothing is that Saudi Arabia did not want to lose market share or raise competition and does not care about volatile oil.
The oil price crash is now destroying the global economy. Of course, low prices are good news for oil consumers in places like Japan or the US, where the gasoline is the cheapest it’s been years. Low oil prices may lead Yen to appreciate. But, it’s a different story for several nations depend on oil sales. For example, everybody knows that Russia’s economy is facing a potential failure.They need capital control measures to save the ruble. Moreover, Venezuela is facing serious debate. Moody’s decision to downgrade Venezuela’s sovereign rating is a marked increase in default risk owing to lower oil prices. Moody’s believes that the key source of vulnerability for the sovereign’s credit profile is the external accounts.
On the other hand, cheap oil may have saved Turkey’s weak economy compare to other big emerging countries. We should not forget that India, Turkey and Taiwan are Goldman Sachs’ top picks in the emerging market space this year.
This week, Swiss Franc jumped almost 30% in value against the Euro after Switzerland’s central bank scrapped a cap on the value of its currency because oil prices, commodity prices have collapsed.This move was part of a strategy to fight deflation, Many countries are fighting with deflation nowadays. China’s and Denmark stocks suffer these days. Euro zone is very confused about Quantitative Easing for boosting inflation or not. The Fed officials agreed to signal that US interest rates are likely to increase in 2015 despite their concerns about slow growth abroad. All eyes on them.