ISO 9001 & UKAS Registered, Electron Beam Services in the United Kingdom ISO 9001 & UKAS Registered, Electron Beam Services in the United Kingdom

21/08/18
Those with shares in the oil industry have seen their assets plunge in value this week, as a result of huge stockpiles of the fluid in the USA.

Last week, the Energy Information Administration revealed that American crude inventories unexpectedly reported 6.81 million additional oil barrels last week – news that has hit the overall market hard.

Following this, light, sweet crude oil for September delivery came in three per cent lower yesterday (August 15th) at the New York Mercantile Exchange. This took it to the lowest level since June 6th, finishing at $65.01 (£51.17), which is significantly lower than last month’s figure of $74.

Similarly, brent crude dropped by 2.3 per cent to $70.76 per barrel, a decline of $1.70 on the ICE Futures Europe exchange.

Phil Flynn, senior market analyst for Price Futures Group, was quoted by Bloomberg as saying: “The headline number along with the negativity in the overall market was taken as a very bearish number. We’re reacting to the shock value of the big build.”

In addition to this, investors have become concerned about a trade war between America and China, as well as financial problems in Turkey, as the value of its currency falls.

Its lira has dropped 40 per cent against the US dollar recently, which could end up having an impact worldwide. Not only has Indian currency fallen to 70 rupees to $1 following this, but the peso in Argentina and the rand from South Africa have also declined in value, TheWeek.co.uk reported.

The Turkish crisis could also have a ripple effect on oil prices, with many investors fearing there could be a contagion among emerging markets.

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