Question

Looking at the current oil price on the stock market, how will this impact the Economic Recovery effort of the global market place?

Answer 1

The current market price of oil has recovered from its loww of almost dollar 12 per barrel and it is expected to to gain momentum due to stability in the global market and countries which are operating in the the middle East has also agreed to similar terms in order to set the prices of the oil and that has boosted the sentiment and oil prices has recovered to $40 per barrel and that is a sign of the economic recovery as oil as a commodity is reflecting the sentiments of the market and it will be having an impact on the stock market as well

Current oil prices is reflecting that concerns due to coronavirus about physical shutdown for a prolonged period of time and an economic recession impending is also not coming into reality because various Central Bank has aggressively reacted to these concerns by cutting off the interest rates and these economy are showing recovery is also so the prices of oil has gone up its reflecting that the normal procedure can soon be beginning between various Nations and it is also reflecting a sign of stability into the global market because oil prices are major indicator of commodity market about the sentiments of global investors so they are proactively determining the future economic recovery.

When there are recoveries in the oil prices from the lows, it will also help in maintaining a stable economic policy for various government because high fluctuation in economic policy is always dangerous for various governments as they are not able to maintain a sustainable policy for a longer period of time so they keep on fluctuating their economic policies because majority of the government are a consumer of oil rather than the producer of oil, so they will be incurring huge trade deficit, if there is high volatility to the prices of oil.

So, it can be said that stability of of current oil price in the stock market is a reflection of a stability of global markets as well and it can be seen as a sign of recovery and it will be enhancing the economic recovery effort of various global marketplace as it will not be hampering them because of stability.