Bear oil market

The oil market has been into the bear zone since early June and the price has fallen below $60 per barrel. The oil market has been closely correlated with the expectation of the world future economic performance. The falling oil price implies that the market is losing confidence in the world economy to some degree. It is not surprising to see people losing confidence, since it seems the trade tension between the US and China is not going to be resolved in any near future even after the two presidents met in the G20 summit. In addition, the UK is near its Brexit deadline and has a new Prime Minister, people are also wondering how the UK is going to leave the European Union and what consequences might be brought by Brexit. People do have good reasons to worry about the world future economic performance.

The oil market is dragged back by other factors in the world economy; however, some industries are dragged back by the falling oil price. Of course, the oil companies are suffering from the lower oil price that the share prices of oil companies fall sharply in general. In addition, other energy industries are also suffering from the lower oil price, including the solar industry. Furthermore, since the lower oil price is also driven by the weak demand, it means those who produce oil related products do not perform very well, although the costs for their raw materials decrease.

Overall, I do not see the oil market can climb out of the bear zone any soon, given the increasing uncertainty in the world economy. Moreover, I think that the market will keep pressuring the oil companies, despite their internal conditions, as the environment matters more in this case.