Crude oil prices up and down the influencing factors brief introduction

Oil futures, which trade trillions of dollars a year, rise and fall more sharply than gold or silver.For investors, understanding the factors that affect the rise and fall of crude oil is the most basic requirement.

So, what are the factors that affect the price of crude oil?As we all know, commodity prices fluctuate around the value of commodities based on supply and demand.Crude oil, as an important commodity, certainly conforms to this law.When supply exceeds demand, commodity prices fall.Conversely, when supply is less than demand, commodity prices rise.The world’s largest oil producers are now concentrated in Opec, Russia, the U.S. and others, which is why Opec’s production cuts move prices up and down every time the market releases crude inventory data.

Of course, in addition to supply and demand, crude oil prices are affected by the following factors:

1. The global economy.In addition to its own value, crude oil refining other petroleum-related products, such as fuel, asphalt, etc., are essential raw materials for economic development.At that point, global economic growth will boost demand for oil, pushing prices higher.It can be said that there is a strong positive correlation between the global economy and crude oil prices.
2. Dollar trend.Crude oil is priced in dollars per barrel, the world’s biggest safe-haven currency.In this way, a stronger dollar will lead directly to the volatility of crude oil prices.In theory, crude oil has a negative correlation with the dollar.A rise in the dollar corresponds to a fall in oil, and a fall in the dollar corresponds to a rise in oil.
3. Geopolitics and weather.With the development of political multi-polarization, economic globalization and production internationalization, competition for oil resources and control of oil market have become important reasons for the volatility of oil market and the soaring oil price.At the same time, abnormal weather can also damage oil production facilities, resulting in supply disruptions, thus affecting international oil prices, but the impact is short-term.

Finally, there are some oil data for investors to watch: EIA data, or raw oil storage data, released every Wednesday, shows that inventory drawdowns are good for oil and inventory builds are bad for oil, which can be called the number one short-term influence on oil.Then there is the non-farm data, which is the number of non-farm payrolls, the employment rate and the unemployment rate in the US.Job gains indicate better economic conditions and higher oil demand is positive for crude oil;The number of active Wells in the United States indicates increased production, which is not good for crude.