Influencing factors of oil price

2021-07-25

As the largest commodity in circulation in the world, the biggest factor affecting the trend of crude oil is the relationship between supply and demand, followed by the money effect.

The relationship between supply and demand includes supply and demand. As long as supply is reflected in the supply stability of the world's major oil producing countries, geopolitics will affect supply and oil prices.

The demand is reflected in the demand for crude oil of the world's major economies. If the economic data of the United States, China and other countries, especially the industrial data, is poor, it will directly affect the demand for crude oil. As WTI crude oil only needs to be supplied to the United States, the economic data of the United States has the greatest impact on its short-term fluctuations. The economy of other countries is more a macro measure, such as the continuous decline of oil prices.

The so-called money effect is monetary policy. If the monetary policy is loose, it will push up the oil price to a certain extent. If the monetary policy is tight and the market funds become less, it will limit the increase of oil price to a certain extent. However, the money effect is weaker than the relationship between supply and demand.

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