The market of energy has always been volatile in nature. However the current year witnessed some really sharp movements of price.
The biggest example of this is the price of the oil of seesawed which has moved up and down from the highs of multi years in mere months.
Fatih Birol, who is the executive director of International Energy Agency has made a prediction in November that this is just the beginning of the tumult in the energy sector.
He had said in a conference at Norway that the world is about to enter an unprecedented period when it comes to uncertainty taking into consideration the oil market.
From the peaks which were obtained in the month of October, the prices have witnessed a fall of about 40 percent.
The Brent at the moment is trading at $54 for a barrel. The West Texas Intermediate on the other hand is trading just above $46 per barrel.
According to the expectations of many, there will be a moderate recovery in the prices of the oil which will ten reach to about $60 to $70 per barrel.
However, there are a lot of factors which will be at its play so as to bring about this change.
According to the energy analysts, the following factors will be responsible for driving the market in the upcoming year.
The president of the United States, Donald Trump has pulled out of the nuclear deal that was to be accomplished with Iran and has also re-sanctioned the sanctions of energy against Tehran.
The analysts had already warned that if the administration follows its plan to zero down the exports from Iran there wont be enough oil so as to meet the demands.
OPEC along with the other major producers of oil which are led by Russia have already cut down the production this year and are planning to continue on the same line by slashing more in the upcoming year.
In the upcoming year, the activities are expected to moderate in the economies all over the world. It is likely to weigh on appetite of the businesses as well as the consumers for the consumption of fuel.
The influence of America on the market of the energy around the world will continue to grow. This is a reason of concern.
Source: Market Insider, Business Insider