Oil and commodities diverging?
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tim
Apprentice
Joined: 26 Feb 2006
Posts: 6
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 Posted: 05/24/08 - 06:12 Post subject: |
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| Good evening everybody. My name is Amelia and I would appreciate if you could give me some information about formation of prices. I am especially interested in relations between prices of oil (since it is very actual matter) and prices of other commodities. Are prices of oil and commodities diverging? Thank you. |
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delmore
Apprentice
Joined: 24 Sep 2005
Posts: 4
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| Posted: 06/23/08 - 01:54 Post subject: |
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| Hello to you too, Amelia. You are right about price of oil, it is indeed very popular subject now, especially because it reaches all time records. Now, there is a connection, and I can say a close one, between price of oil on the world market and price of other commodities. But I would say that they are converging, not diverging. The reason is quite simple. Oil is used as an energy source for production of lots of goods. If not for production, it is used for transport. So, when the price of oil increases, production and distribution costs are higher. Producers usually place that increase on customers. Therefore, when oil is expensive, everything else is too. Basically, that would be all from me. Take care! |
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