The twelve drummers drumming are thought to refer to the twelve points of the apostles creed and about reaffirming faith. Anointing with holy oil is an apostolic tradition and part of that faith, believed to have originated from the oil consecrated by the apostles themselves.
Today, we know oil to be a natural resource extracted from the earth, which can be refined into products such as gasoline, jet fuel, and other petroleum products, making it an important part of the world's energy sector. It is also no secret that oil prices are inherently volatile. Political, economic and other changes have consistently rocked the oil landscape since 1970, with sharper and more frequent volatility in the past three decades.
Volatility is a fact of life in the oil industry and is tending to increase in impact and frequency. To deal with increasing volatility and growing supply chain complexity, oil companies are needing to rethink supply chain management. Incidentally oil is carried in metal drums but the measurement is in barrels.
Since oil prices are so notoriously volatile, their actions in 2016 were no exception. Prices plunged at the start of 2016 as unchecked supplies piled up in storage due to resilient shale production and rising output from the Organization of the Petroleum Exporting Countries (OPEC). The OPEC spent most of 2016 arguing within itself, instead of working together to fix a problem that had grown worse due to its decision to battle shale producers for market share. The oil price decline was generally suffered by customers in consuming nations.
Similarly during this year (2020) oil faced a price war which was activated by a collapse in discussions between the OPEC and Russia over proposed oil production cuts amidst the COVID-19 pandemic. The price war led to significant circumstances on the oil economy, which was the energy equivalent of the 2008 financial crash.
Towards the beginning of March, Russia and OPEC failed to agree on how their arrangement to cut oil productivity should work. OPEC needed to go forward with the cuts while Moscow proposed analyzing the effect of the coronavirus on the economy before making cuts. This precautionary move led to the collapse in negotiations between other OPEC members.
OPEC suggested extra production cuts of 1.5million barrels every day beginning in April and reaching out until the year’s end. Russia dismissed these extra cuts. 2020’s crash occurred in only half a month after collapse in discussions. Also due to the worldwide Coronavirus pandemic and COVID-19 lockdowns this year, a negative oil price of $37.63/bbl. for May’s WTI contract accompanied storage tankers in the U.S.
The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested. This may be partly the result of exchange rate fluctuations in investments which have an exposure to foreign currencies.
If you would like to read the previous article for the eleventh day of the '12 Days of Christmas: Eleven Pipers Piping', please click here.