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How to Predict Oil Prices. Oil Price Prediction Website - Best Strategies for Predicting Future Oil Prices - Oil Price Info

Oil Price Predictions

If anybody had an exact handle on exactly how and when oil prices were going to increase and decrease they would make a fortune. In actual fact many people do, by correctly evaluating various socioeconomic and geopolitical factors and bringing them together so as to create a picture of where the world is and where it is heading.

To state an obvious fact, essentially the price of oil is regulated by the laws of supply and demand. Political instability, war, natural disasters and other such drastic and sometimes unforeseen events can reduce supply and this can lead to sharp increases in the price of crude oil which quickly translates into higher prices for the end customer.

War and instability are often major determining factors which lead to sharp increases in oil prices. With the uncertainty that they create suppliers can have difficulty in convincing buyers that delivery will be unaffected.

This, however, does have the potential to create a counter effect in which consumers cut back on the amount of fuel they use, creating oil price reductions back towards, or even beyond, the original levels.

Recession too has a similar effect. Consumers become mindful of the need to make savings and one of the ways in which they might do this is to reduce car usage or even cut down on their heating bills. Companies looking to reduce their outgoings may ask employees to work from home, reducing their fuel consumption thereby driving down the demand for, and thus the cost of, fuel.

Speculation and oil price predictions

Other factors that might bring about price reductions or increases include movements in refining costs, the cost of distribution and marketing, or a change in the level of taxation applied to the product.

Speculators regard oil as a major commodity that may be bought and sold at strategic times in order to generate a profit. Although purchasing barrels of oil, they in fact buy paper contracts that represent physical stocks when prices are low, and use their knowledge and skills to try to make oil price predictions in order that they might sell at a time when prices are at their highest so as to maximise their profits. When speculators invest large amounts of money into the futures market this can have the effect of driving up the price of oil whatever the other factors affecting supply and demand happen to be at that moment in time.

If you have ever considered trading on oil prices then the above websites may be of interest you to. Sites like these allow you to bet on the direction of oil prices, so you can profit (or lose) on both directions of the oil price. Spread betting in general is a very risky form of betting and one should only bet money they can afford to lose. Independent financial advice should also be taken prior to trading or betting using oil prices, as they can move quickly in either direction meaning you can gain or lose a lot of money in a very short space of time.

 
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