In case you hadn't noticed, this week's been eventful in the oil world... On Thursday the price had slipped below $122/barrel at one point, yet on Friday at went above $139, before settling at $138.54 at close of trading!
The rise on Friday was the largest one day rise in history. Now, people will tell you that it all happened because the dollar fell against other currencies. This is part of it, but there are two important things:
- The dollar fell by a couple of percent at most, while oil went up more than 10% in 2 days, so there's clearly more to it than that.
- For those of us in the UK, there's no respite, because the exchange rate between the dollar and pound hasn't shifted much from where it was a week ago, so the price of oil in UK £ is higher than ever.
So why's the price going up like this? Simple, demand is rising, but global supply has been flat for three years now. That's the good news though - the bad news is it will start declining soon, and then we'll really see some price rises!
To read more about why it's happening, check out: