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May 12, 2023

Crude Oil: Obstacles Ahead of $100

Crude Oil: Obstacles Ahead of $100 The price of crude oil has been on a steady rise since the beginning of the year, with Brent crude oil reaching a six-year high of $77 per barrel in July. The market is now abuzz with talk of crude oil hitting the $100 mark, a level not seen since 2014. However, there are several obstacles that could prevent crude oil from reaching this milestone. One of the biggest obstacles is the ongoing trade war between the United States and China. The two countries are the world's largest consumers of crude oil, and any disruption in their demand could have a significant impact on the price of crude oil. The trade war has already led to a slowdown in the Chinese economy, which could result in lower demand for crude oil. Another obstacle is the increasing production of shale oil in the United States. The United States has become the world's largest producer of crude oil, thanks to the shale oil boom. The increased production has led to a glut in the market, which has kept prices in check. If the United States continues to increase its production, it could offset any increase in demand from other countries. The Organization of the Petroleum Exporting Countries (OPEC) is also a factor to consider. OPEC has been cutting production in an effort to boost prices, but there are concerns that some members may not comply with the agreement. Additionally, OPEC's decision to increase production in June has led to a drop in prices, which could make it difficult for crude oil to reach $100. Finally, there are concerns about the global economy. The International Monetary Fund (IMF) recently downgraded its forecast for global economic growth, citing trade tensions and rising oil prices as factors. A slowdown in the global economy could lead to lower demand for crude oil, which could prevent prices from reaching $100. In conclusion, while the prospect of crude oil reaching $100 is exciting, there are several obstacles that could prevent it from happening. The ongoing trade war between the United States and China, the increasing production of shale oil in the United States, OPEC's production cuts, and concerns about the global economy are all factors to consider. It remains to be seen whether crude oil will overcome these obstacles and reach $100, but one thing is certain: the market will continue to be volatile and unpredictable.