What’s going on with the oil price

Posted by Yuka as World

Remember when I was in HND doing the finance project about the london stock exchange market trend (FTSE).The oil price was skyrocked to the historical high point. But now it has been slashed about 100 dollars within just half year.

I was doing the Royal Dutch Shell which is one of the companies in my portfolio at that time. It was the only share whose price was still increasing.The other three shares suffered from the rumor of the recession and the sub-prime crisis have kept slumping until now.However,at the conclusion,I predict that even though the RDS benefited from the high oil price, the future declining demand would drag down the oil price eventually.I know the prediction will definitely come true,but surprisinly, it came so fast and so dramatic.

Now, a lot of oil project have been delayed or shuttle down reacting to the low oil price.Those delays are likely to reduce the future supply and set a stage for another surge in the oil price.As soon as there is sign for the recovery of the economy, the oil price will rise again.

Who is controlling the oil price: the customers, the industry or the economy?I know someone will say all of them together influence the market which is said under the free market thoery. If the free market is supposed to keep the price in the fairest and stablest place how can it fluctuated so dramatically.Is there something wrong with our market? why is it so frangible? Who can slove those problems and who can stable our market?

By:yy