Could the price of oil rise in 2016?


This week, Morgan Stanley (Global Financial Services Firm) has published a report which shows that the price of a barrel of oil could fall to $ 20. Analysts estimate that the price will fall by around 10-25 percent. Conversely the political tension between Saudi Arabia and Iran, which are important exporters of oil, is still present.

According to the data for 2014 Saudi Arabia is one of the biggest, just behind the United States, oil producer in the world. Daily extraction of raw materials reaches 11.6 million barrels there. In comparison to Iran on account of production is the seventh in the world. Every day 3.4 milion barrels are extracted.

In January 2016, Saudi Arabia and Iran suspended diplomatic realations. The conflict between this two countries can provide to reduce extraction of oil. Increasing political conflict can destabilize the world’s prices of oil.

It’s worth mentioning that, in addition to high supply of raw materials, even in case of any politacal conflict between Saudi Arabia and Iran the supply of raw materials will be provided safely. The situation stabilizes cheap oil from the United States. Additionaly experts evaluate that the particular problem we are likely to reach in 2016 is the lack of place to such big amounts of oil. Some of analysist consider that, prices can be expected to drop to a very low prices only $10 per oil barrel.

Marked increase of prices is not likely to occure but present situation in the Middle East is very unstable and it can completely change today’s oil market.



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