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Commodities Markets Display Greater Signs of Uncertainty

Financial markets of all shapes and sizes seem to be impacted by the current worldwide crisis that has been engulfing the planet. The fossil fuel industry has itself been presented with several unique challenges outside of the current crisis.

Oil Markets in Trouble

The way in which the oil industry has been working in recent years has left it with a weak-looking foundation. The oil industry has been hit with back to back events that have led to destructive effects. There are many oil companies that will in the near future be in need of bailouts. The path that was blazed in order to get us here involves a few different mishaps.

Saudi Russian Oil War

Two of the world’s largest oil-producing countries are Saudi Arabia and Russia. These two countries in either an attempt to harm each other or in a interconnected move to harm US oil markets have been driving oil prices down by overproducing and generating a supply glut. The low prices have seriously harmed American oil companies’ profits.

The Threat of Chinese Economic Crash

The present economic reports put out by the Chinese government show that the country is suffering from a decrease of its economy for the first time in over 50 years. This has stirred up a lot of anxiety amongst commodities investors. This has further worsened the selling environment and drove prices down even further.

Lowest Oil Prices in Modern History

With oil prices that have fallen below $20 a barrel technically it is less costly to buy a barrel of oil than a bucket of KFC fried chicken. It may seem interesting to the average individual to see the cost of filling their cars up drop by half. This might not be as good of news as you thought.

Potential Ramifications of Current Economic Situation

The level that oil prices are right now is so low that American companies cannot even continue to operate and make a profit. If oil prices do not rebound soon this could mean that many oil companies will go out of business. This could add to the already severe unemployment crisis that America is experiencing.

More information is available at The Wall Street Journal.

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