Economic security

Strategic approach needed for China as oil price keepsfalling

On Wednesday, the price of crude oil dipped below $30 a barrel in the New York marketfor the first time in 12 years. But international oil prices could yet fall even further.

The current oil price is down to the tug of war between demand and supply. There hasbeen excess global oil supply for some time, and it happened because of four main factors.First, most global oil producing countries have been boosting their capacity, which has reduced the previous dominance of the Middle East in crude oil production. Second, the signing of the Iran nuclear deal has eased concerns about potential conflict, and allowed further liberation and acceleration of Iran's oil production. Third, Europe's economic recovery has been slow, resulting in weak energy demand. Lastly, emerging economies are also struggling with a slowdown in economic growth. The worldwide economic downturn caused by the financial crisis in 2008 still lingers, leading to sluggish demand for global energy resources.