Ukraine Invasion Impact on Oil Market Prices
Rippling Volatility Across Several Markets
Crises are often seen to be full of threats with respect to amateur traders, yet full of abundant opportunities with respect to the professionals. Large economic and geopolitical changes are usually accompanied with massive long and short trading volumes, where significant amounts of wealth transfers are recorded. The Ukraine invasion spiked rippling volatility across several markets, where the safe haven, Gold , the leading U.S index, DOW Jones , and the main source for war, Oil, are seen to be attracting the greater amount of investor participation.
OIL | PRICE RANGE |
2022: RUSSIAN-UKRAINE WAR | +96% |
2020: COVID-19 | -100% |
2008: FINANCIAL CRISIS | -77.5% |
1990: GULF WAR | -58% |
ALL TIME HIGH | 147.27 |
2022 HIGH | 129.42 |
PERCENTAGE TO REACH ALL TIME HIGH | +12.12% |
As oil is a finite resource, its price can see massive fluctuations due to supply and demand changes. When geopolitical tensions rise, this volatility makes it extremely popular among traders, with the aim of making large profits, to increase their equities in a relatively shorter time span.turbulent conditions.
*Trading Forex is Risky
On 24 February 2022, Russia launched a military invasion on Ukraine, boosting oil prices to unbearable highs, with rippling inflation across worldwide economies.
Worldwide demand for oil fell rapidly in 2020 as governments closed businesses and restricted travel due to the COVID19- pandemic. In April, an oversupply of oil led to an unprecedented collapse in oil prices, forcing the price of the futures contract to plummet from 18$ a barrel to around 37$- a barrel.
U.S. Oil futures hit their highest level of $147 on July 11,2008, amidst one of the biggest financial crises of history.
On August 1990 ,2, Iraq invaded the State of Kuwait. The invasion led to a rise in prices from 21$ per barrel at the end of July, to 28$ per barrel on August 6. On the heels of the invasion, prices rose to a peak of 46$ per barrel in mid-October
Overall, most analysts have turned bullish on the oil sector for 2022. Investing in energies can provide investors with diversification, a hedge against inflation, and excess positive returns
(Since the 1970s, oil prices have become more volatile. They're being affected by the anticipation of future supply and demand, more than the actual levels themselves.)
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