Crude oil prices are once again seeing a huge rise. Brent crude, which was trading in a limited range of 100 to 102 dollars per barrel for the last several days, has suddenly gained momentum. Now it has crossed the level of $ 111 per barrel. This rise in crude oil is going to have a direct impact on the global stock markets, rising inflation and ultimately on the pockets of the common man. Whenever crude oil prices rise at the international level, the fear of price rise of everything from petrol-diesel to daily essentials increases, because due to cost of freight transportation, the cost of every item increases.
Why are crude oil prices increasing?
There are many serious reasons hidden behind this sudden imbalance in the market. The ongoing geopolitical crisis and tension in West Asia has made the situation critical. Along with this, the closure of the ‘Strait of Hormuz’, one of the world’s most important sea routes for oil trade, has proved to be a major blow to the global supply chain. On one hand, big oil producing countries are continuously cutting their daily production, while on the other hand, the demand for energy is increasing rapidly around the world. This ever-widening gap between demand and supply is pushing prices wildly higher.
All previous records broken
If we look at the latest data, the market situation becomes clear. There has been a huge jump of $ 4.483 (about 4.17 percent) in Brent crude, after which its price has reached $ 111.863 per barrel. How widespread this rise is can be gauged from the fact that Brent crude has registered a huge increase of about 55.95 percent in the last one month and 55.43 percent in the last one year. Talking about American benchmark, WTI crude is also not behind in this race. It has reached $99.67 per barrel with an increase of $3.35 (about 3.48 percent) and may soon cross the $100 mark.
Panic in stock markets
This inflation of crude oil has started scorching the stock markets around the world. The fear created by this boom in the energy sector is dominating investors. A big fall of 2.45 percent was seen in Gift Nifty and it is trading at the level of 23,218.
Tremendous pressure has also been seen in the American markets. Dow Jones has fallen by 1.63 percent and Dow Futures have fallen by 0.24 percent, while S&P 500 has recorded a slight weakness of 0.14 percent. The condition of Asian markets is also no different. Japan’s Nikkei closed in deep red with a huge fall of 2.55 percent. However, amidst all this, Hong Kong’s Hang Seng index was a slight exception, which saw a slight increase of 0.61 percent.