Have you ever imagined that world oil prices would be zero, even minus? This is something that is absolutely impossible and beyond everyone's predictions.
Oil as an important commodity to support various business activities and the wheels of the economy, now the price is very, very cheap.
forex stock oil market price movement chart
Look at the picture above. World oil prices fell to the lowest level in history, even at the level of -38$.
The question for all of us is why the price of oil can be zero or even minus ? Of course, the simplest economic law of supply and demand easily answers this question.
Since the COVID-19 outbreak in early 2020 until now and has spread to all countries in the world, even the number of victims infected in America and Europe is among the highest in the world.
Only developed countries are affected, let alone developing countries?
Then many countries have implemented lockdowns or regional quarantines. All residents are prohibited from working outside the home. Work from home, learn from home, stay at home.
OIL DEMAND IS SHARP.
This quarantine policy really hit the economic sector. Because human movement is restricted, economic activity is hampered or even stopped.
Previously people could travel out of town/out of island/overseas, now they can't. Previously people could gather to a religious event / social event / entertainment event, now they can't.
The wheels of the economy suddenly stopped completely. Flight activity has decreased drastically, our vehicles at home become idle and rarely used. And many factories stopped operating.
As a result, DEMAND OR DEMAND for oil has dropped sharply. Nobody buys oil anymore.
OIL SUPPLY IS AVAILABLE.
Meanwhile, in terms of supplies, it continues to be abundant. It is the nature of the character of oil, when a source of oil is found, it will continue to flow. Oil production cannot be stopped.
Oil drilling companies will continue to accommodate this volume of oil. As a result, there was an OIL FLOOD in the market, but no one consumed the oil.
Oil becomes a worthless item because there is too much supply. This is what causes world oil prices to be zero or even minus !
The COVID-19 outbreak has devastated the business and business world. The industries most affected (significant impact) are tourism, hospitality, transportation (air, land, sea), cafes & restaurants, shopping and entertainment centers.
Hopefully COVID-19 will end soon and a cure will be found so that the economic world will return to normal and be excited again. AMEN..
CONSISTENT AND OPTIMAL PROFIT GREETINGS.
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