Brent and WTI prices declined significantly on Friday, January 15. Thus, Brent futures for March settlement fell 14% on the ICE Futures Europe exchange and settled at $29.18 a barrel, having fallen as low as $28.82 a barrel.
WTI futures for February delivery ended the week down 11% at $29.42.
It remains an open question when the oil price slump will end.
Yet another oil price decline is widely associated with the expectations of lifting of Western sanctions on Iran. However, the market immediately reacts to such important factors. Obviously, it is also the result of political maneuvering.
Crude oil price has been at the level of $100 a barrel for quite a long time, regardless of growth or decline in production. As a result, oil exporting countries got used to excess profits that meant vast costs which needed to be greatly cut in the light of the current situation. And that is no easy thing to do.
US banks play an important role in this situation as they manage global markets and oil prices.
Oil price collapse and the Fed’s interest rate hike follow several years of cheap money and high asset prices. This leads to devaluation of most world currencies and a sharp reduction of income in many countries.
It is a good time for the US now when assets fall in price as it can have control over majority of assets with the strong dollar.
