It was the average daily temperature that became a persistent fundamental trigger for the decline in crude oil prices| FXMAG.COM

Naturally, weather conditions are just one of the factors negatively affecting oil prices

We saw a huge decline in commodities prices - was it about higher temparatures in the USA? Let's hear from Andrey Goilov from RoboForex.

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Andrey Goilov: An unusually warm winter in 2023 in the US could be the main reason for a number of declines in commodity prices, such as the prices for crude oil, oil products, gas, and other assets.

Andrey Goilov: With energy demand normally increasing in winter, demand for energy carriers becomes higher as more fuel is withdrawn from reserves for heating purposes. The December 2022 to February 2023 period was expected to be cold, and asset prices were based on this forecast. However, weather conditions turned out milder, as a result of which expectations were not met.

Andrey Goilov: In the US, this was well displayed in the Department of Energy's weekly reports on commercial oil reserves. Towards the end of winter, the figures increased noticeably. This, among other things, put pressure on the price of crude oil.

Naturally, weather conditions are just one of the factors negatively affecting oil prices

Andrey Goilov: Naturally, weather conditions are just one of the factors negatively affecting oil prices. There are many other reasons to sell black gold. However, in this case, it was the average daily temperature that became a persistent fundamental trigger for the decline in crude oil prices.

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Andrey Goilov

I have a higher economic degree and have been working on the Forex market since 2005. Now I'm a financial analyst and successful trader, also member of RoboForex Analytics Department. I provide short- and long-term reviews for the company's clients, create analytical articles on financial markets and educational materials for RoboForex.

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