The COVID-19 pandemic has had a drastic effect on everyone’s lives. Its financial effects are apparent in the fluctuation of oil prices. As less people travel, the supply of oil has been far greater than the demand. Since the pandemic began in March, we’ve seen oil futures selling as low as minus $40 per barrel.
Along with the plummeting prices, there have also been signs of hope along the way. After the rapid decrease in oil prices, we then saw a resurgence as oil prices rose 13% after parts of the U.S. and global economies re-opened.
The end of July saw U.S. crude inventories fall by 7.4 million barrels. The weaker dollar made oil prices cheaper for those with foreign currencies which benefited the oil market. In early August, oil prices fell again after a wave of new COVID-19 infections were seen globally and investors feared fuel demand would decline once again.
As lockdowns tighten in areas where the COVID-19 infection rate is highest, the demand is likely to decline. If the infection rate drops and people can once again resume traveling, oil prices could rise.
As we continue to face a rise in coronavirus cases globally and especially in the United States, the oil market and oil prices still face an uncertain future. It will likely be on a roller coaster of rising and falling oil prices until the U.S. and global economies stabilize.
Richmond Financial Services provides next generation payment processing services for the oil and propane industry including electronic recurring payments. As we face these uncertain economic times, providing customers with fast and efficient payment options are more important than ever before. Contact us to learn more about all our payment processing solutions.
