Vladimir Putin, the president of Russia, said that if the oil price were to stay at $80 a barrel for a long period, then the global market would collapse. This implies that the oil price has a huge impact on the world market. However, the oil price keeps decreasing. This is good news for China. First, China is one of the largest oil-consuming countries in the world, so it is beneficial for Chinese importers. Second, the cost of energy will decrease, increasing consumers’ buying power.

(http://ww4.hdnux.com/photos/34/31/04/7442743/3/rawImage.jpg)

There are many reasons behind recent declines in the oil price. First, the rate of economic growth is declining, and therefore oil demand and prices have been decreasing. Second, the decrease in the oil price has increased the supply of oil from both OPEC and non-OPEC countries. The supply of OPEC increased from 30.66 million barrels per day to about 31 million. Finally, many Western countries, particularly the U.S., want to damage the Russian economy and encourage the recovery of the European economy.

It is indeed good news that oil prices are declining, even for only a short period.

Wendy Lin