In August 2014, many people were anxious due to a slump in oil prices. However, prices recovery is almost certain.
Since June 2014, WTI barrel dropped by around 57%. Such quick rates of falling exceed an average reading for the last 30 years. Despite possible positive or negative changes in oil prices, prices tend to rise in the long-term future.
The oil world has changed for sure. Using rectifying technologies and hydraulic fracturing, it became possible to extract gas and oil with the help of new methods.
According to the data of the US Department of Energy, since 2010, oil demand is growing along with its delivery. Given the same volume of demand, a drop in supply will be shorter in the nearest months after the long period of low prices.
It should be taken into account that this process can be speeded up by the decisions of Saudi Arabia and OPEC, especially on production cut. Both OPEC and Saudi Arabia try to keep their authority, so they remain silent. As soon as pressure on the market is lowered due to US companies’ bankruptcy, the cartel will be able to cut oil output, thus raising prices.
Oil is a limited resource that is used more and more actively. There are 1.4 trillion barrels of oil equivalent oil and gas reserves, one of the global oil companies informs.
One need not worry yet that the world will run out of oil. Currently, people and companies should use available oil inventories. However, this situation won’t last for long.
