Causes of Rising Global Oil Prices

Rising oil prices worldwide In the global economic world, oil price fluctuations are the main factor. According to analysts, the war between the US and Iraq is one of the reasons for the safety of the oil business, which is related to the influence of this energy in all production activities. Crude oil is always an important element of a diversified portfolio. This advantage further enhances the historical diversity of 2009/2010. As the Fed invests more funds into the system, crude oil prices may rise. This will improve investor performance while reducing the volatility of the portfolio in 2011.

But what was the cause? Most people accuse the 1973 oil crisis. The Organization of Petroleum Exporting Countries (OPEC) announced the embargo on Western countries. This led to a sharp rise in crude oil prices worldwide, which raised the cost of goods and resulted in an increase in unemployment. Even though the financial crisis of 2007 - 2008 may pose a concern for economic stagnation again, there are few indications that the events of the 1970s will occur again. People are worried that the Fed's monetary policy and parliamentary fiscal policy (including economic stimulus measures) will lead to inflation and high consumption.

Beyond data in the next October, price pressures will rise further. First of all, as the crisis took place in the Middle East, global crude oil prices rose in recent weeks. There is usually a time lag, but there is a possibility that the pump price will rise possibly by the end of November. Furthermore, according to Office data, in the past few months wage increase rate in rural formal sector continues to rise (Figure 6). Wage growth will further increase after the government announces that the lowest subsidy price for rabbin (winter) crops is the highest in the four years in mid-October.