Oil- Forex Correlation
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Oil Rates Description
Oil is the commodity par excellence. Due to its high industrial and geo-strategic value, its current and future price is very sensitive to news or rumors that may affect supply and demand. This means that any of the extraction, processing, transport, taxation and final distribution steps, together with forecasts of countries consumption, may have big impact on its price.
Crude oil producing countries are associated mostly in OPEC to guarantee production and price stability, but other important players in world oil production are not integrated in this organization, which often hinders the proper functioning of the institution.
According to recent estimates, world oil reserves will run out or cease to be profitable in the next 40 years.
Financial markets offer various tools to operate, either speculatively and price hedging strategies, both industrial petroleum and its derivatives. The main uses to which these derivatives are used is as fuel for passenger and freight transport, electricity production and processing of millions of different items as one of its many derived plastics.