Throughout 2016, oil prices around the world were affected by a range of different events. While for the most part prices increased, there were some big drops that could still have some impact on the price in 2017.
Here are some of the bigger events that altered oil prices in 2016 and what they could mean for the future.
January: Russia Attempt to Boost Oil Prices
2016 began with a slight increase in prices as Russia announced that it was willing to work with Saudi Arabia to cut their output in order to avoid further market flooding.
While the Saudi Arabian government denied that this was going to happen, a deal between the two nations was eventually made towards the end of the year.
March: U.S. Shale Production Plummets
The amount of shale the US was producing dropped sharply, thanks in large part to the number of rigs sitting idle and not drilling. The number of barrels that were produced dropped by roughly half a million.
Due to the lack of production, oil prices increased sharply. It would ultimately prove to be the largest price increase of the year.
July: U.S. Gasoline Stocks Rise
In July, gasoline stock in the U.S. unexpectedly increased. The surprise of the increase lead to oil prices dropping to its lowest level since April.
September: Russia and Saudi Arabia Make a Deal
After months of speculation and negotiations, Russia and Saudi Arabia were able to finally come to an agreement about plans to stabilise oil prices.
Oil prices went back up by five percent after this agreement was made. Speculation then also began to circulate about whether Russia’s and Saudi Arabia’s product freeze talks would actually be successful, despite Saudi denying that it would happen in January.
What Will Happen to Oil Prices in 2017?
Given that many of the ups and downs in oil prices in 2016 were due to unforeseen circumstances, it’s difficult to say precisely what will happen to oil prices in 2017.
While the OMJ (Oil Market Journal) has warned that prices could rise by another 15%, another incident on the stock market could bring the prices back down again.