Many touch $100 a barrel. In May,

Many
researches have indicates that the fundamentals of demand and supply are
important to understand the short run and long run fluctuations in oil market.
The fluctuation studies are helpful for investors to decide which investment is
profitable and which is not. There are many other factors of fluctuation in
prices of oil like increase in
demand from developing countries,

Currency
fluctuations-when there is an increase in US dollar it will be expensive for India
to import oil thereby affecting its demand and price, many weather conditions
also decides the prices and speculative buying and selling also OPEC being the
producer of 40% global oil also fluctuates the prices. The point to note is
that the fluctuations in oil prices is not solely due to financial speculations
but majorly due to oil demand and oil supply. Apart from these there are many
disturbances in the economy that causes the crude oil price to fluctuate, these
disruptions are short-lived because as the production pattern changes around
the world the price also starts reacting accordingly. It was found that many
historic global events had a negative effect on oil prices which further
affected the production process in many countries. Some of the events were US
Subprime crisis and the following global recession (2008) the crude oil price
fell from $101.84 a barrel to $41.34 a
barrel (as shown in fig 1), The Arab Spring (2011-12) made the crude oil price
to touch $100 a barrel. In May, 2011 due to flooding of Mississippi River the
oil prices fluctuated. In 2014 OPEC vowed to keep crude oil price above $100 a
barrel foresightening the future but in mid-2014, the price of oil began to
fell from $100 a barrel to be touching $36 a barrel .The reason for
availability of cheap oil was OPEC as it did not allow to cut oil production as
a result the prices started to dwindle. Even post demonetization and GST the
crude oil price recovery was sluggish. Thus this historical global events have
majorly impacted the crude oil price, the recovery from which is still
continuing.

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