Commodities Markets Display Greater Indicators of Hesitation

Financial markets of all shapes and sizes seem to be affected by the current worldwide crisis that has been engulfing the globe. The fossil fuel industry has itself been presented with multiple unique challenges outside of the current crisis.

Oil Markets in Trouble

The way  the oil industry has been working in recent times has left it with a weak-looking foundation. The oil industry has been hit with back to back events that have led to devastating effects. There are many oil companies that will soon be in need of bailouts. The path that was blazed in order to get us here involves a few different events.

Oil Concerns Between Saudi Arabia and Russia

Two of the world’s biggest oil-producing nations are Saudi Arabia and Russia. These two countries in either an attempt to harm each other or in a coordinated move to harm US oil markets have been driving oil prices down by overproducing and making a supply glut. The low prices have seriously damaged American oil companies’ earnings.

The Risk of Chinese Economic Crash

The current economic reports put out by the Chinese government show that the country is experiencing a decrease of its economy for the first time in over 50 years. This has stirred up a lot of anxiety amongst commodities investors. This has further worsened the selling environment and drove prices down even more.

Lowest Oil Prices in Modern History

With oil prices that have dropped below $20 a barrel technically it is less costly to buy a barrel of oil than a bucket of KFC fried chicken. It may seem interesting to the average consumer to see the cost of filling their cars up drop by half. This might not be as good of news as you thought.

Possible Economic Consequences

The level that oil prices are right now is so low that American companies cannot even continue to operate and make a profit. If oil prices do not rebound soon this could mean that many oil companies will go out of business. This could add to the already significant unemployment crisis that America is experiencing.

More information is available at The Wall Street Journal.

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