Critical analysis of the ongoing Oil Price volatility

Running head: ECONOMICS
Critical analysis of the on-going oil price volatility, its economic impacts and policy
implications for China
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1
ECONOMICS
Critical analysis of the on-going oil price volatility, its economic impacts and policy
implications for China
Crude oil prices are one of the major economic factors that have highly significant impact
on the world economy. In the past 10 years, the oil prices have experienced many ups and downs
leading to severe effect on the economies of many countries.
Figure 1: WTI oil price from 2009 to 2019 ($/bbl)
(Source: Macrotrends 2020)
The above image shows that the oil price faced extremes in this decade with highest at
$110/bbl and lowest at $26/bbl. The price went up to $110/bbl during 2011 due to the political
turmoil in the oil producing countries in the Middle East and sudden fall in the oil production
and supply (Macalister 2011), and it collapsed in 2015-16 due to the issues of climate change
and reducing carbon emission to keep the global temperature rise within 1.5 degree Celsius