Weekly Wrapup: Upheaval
Such a topsy turvy week this and in today's wrapup we will discuss the dip in oil prices, why that dip didn't translate to cheaper fuel for consumers, why investors the world over are panicking, and how the Coronavirus affects the upcoming Olympic games.
So let's get started!
Why oil prices have been tanking?
On Monday, we talked about the sudden drop in Crude Oil prices. Most of the world's oil is controlled by a very small group of companies- a Middle Eastern cartel called OPEC, the U.S. and Russia. And back in 2017, when oil prices hit terrible lows, Russia and OPEC started colluding to cut production and keep prices in check. They've been operating together ever since.
But now, their relationship is in jeopardy. The instigator: Coronavirus. And oil prices have been crashing since. And you can find out more about the dramatic saga here.
The Perfect Storm is here, or is it?
Global stock markets have been tumbling. Japan, United States, Indonesia, Hong Kong, Philippines, India- you name it.
And the question on everyone's mind right now- Why?
One explanation is that the fall is premised on rational considerations. Investors are simply reacting to events like the Coronavirus, crashing oil prices, geopolitical tensions etc. When a perfect storm such as this one makes landfall, selling makes absolute sense. But what if that's not the only reason? What if they are driven by a more primal instinct- fear?
Find out more about the crash and human psychology right here.
The curious case of stable fuel prices
On Thursday, we discussed why fuel prices in India are not catching up to global oil trends. After the collapse of the Russia-OPEC relationship, oil prices the world over tanked. Crude oil that was being sold at $65/barrel dropped down to $35/barrel.
Now this is terrible news for countries that export oil. But for India, it means we can import the oil we need at cheaper rates. So then, you would expect consumer fuel prices to come down as well, wouldn't you? Unfortunately, that hasn't happened yet. Why?
You can find out here.
Can Coronavirus threaten the Olympics?
On Friday, we spoke about how the Coronavirus is affecting the Olympics.
Japan has been preparing to host the 202o Oympics in Tokyo for a decade now. But the rapid spread of Coronavirus has necessitated a rethink now.
How does Japan deal with the situation? Cancel the games? Postpone them? Conduct them without spectators? Or simply wait for things to settle down?
Find out all the possibilities here.
We'll see you next week. Until then, stay safe and wash your hands!
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