Two of the world’s biggest commodities are continually nosediving, overthrowing several countries’ economy to a halt.
From $1,140 per ounce of gold to $1,137, the precious metal has been dropping constantly, and today, it reached its bottom level since April 2010. Similarly, with just the same direction, oil is tumbling down for its 5th consecutive day. And just like gold, oil has also hit its lowest turn since 2010. Brent crude’s value downplays to only $1.92, dropping 90 cents or 1% from yesterday’s value. And West Texas Intermediate crude fell to $76.59, 70 cents less than yesterday.
It is said that this down turn is the effect of the threatening of ISIS to capsize oil production in Iraq. This fall down is affecting countries like Russia, Saudi Arabia, and Venezuela; however, analysts say that Saudis will just have to forebear the issue in order to save their percentage in the US market—a share that was also afflicted by the shales boom.
To preserve their share and make profit, shale oil has to keep its crude price around $76 to $77 or else they won’t be as vying as other international producers. Saudi is the largest crude producer in the world to date; thus, the country is determined to keeping its spot against rivals in the United States.
Because of this downward trend, businesses and investors need to rethink their plans along with the movement of the present economy. However, despite the rapid fall of other countries’ economy due to oil and gold’s awful turn, USD is getting even stronger. Thanks to Republican Party for winning the mid-term elections, USD is now on its seventh year slam against yen, leaving China at its lowest in four consecutive years.
And not only China is affected with the strengthening of dollars, Britain and Russia are also showing signs of struggles and weakness since last month—all because of the constant drop of crude value. Aside from oil price changes, the ongoing war between Russia and Ukraine has caused a dilapidating distress over their present economy. And as of today, dollar was buying euro for just under $1.25.