just like equity securities, commodity prices are primarily determined by the forces of supply and demand in the market. 2 For example, if the supply of oil increases, the price of one barrel decreases. Conversely, if demand for oil increases (which often happens during the summer), the price rises
How commodity prices affect businesses?
Fluctuating commodity prices not only have a significant impact on business, they also impact the trading markets and the overall economy. ... This is because it makes the import of raw materials and sources of energy, required for the everyday functioning of different economic sectors, more expensive.
What are the major factors influencing commodity prices?
In the shorter term, commodity prices are affected by amongst other factors, the weather, interest rates and speculation.
Income and population. ...
Costs and technology. ...
Government policy and producer organisations. ...
Weather. ...
Interest rates and the US dollar. ...
Speculation.
What makes commodity prices fall?
As the supply and demand for commodities change, the price of the commodity will also change. The fundamental rule is that commodity prices will rise with increasing demand. ... On the flip side, the price of a commodity will fall when faced with decreasing demand and increasing supply.
Answers & Comments
Answer:
just like equity securities, commodity prices are primarily determined by the forces of supply and demand in the market. 2 For example, if the supply of oil increases, the price of one barrel decreases. Conversely, if demand for oil increases (which often happens during the summer), the price rises
How commodity prices affect businesses?
Fluctuating commodity prices not only have a significant impact on business, they also impact the trading markets and the overall economy. ... This is because it makes the import of raw materials and sources of energy, required for the everyday functioning of different economic sectors, more expensive.
What are the major factors influencing commodity prices?
In the shorter term, commodity prices are affected by amongst other factors, the weather, interest rates and speculation.
Income and population. ...
Costs and technology. ...
Government policy and producer organisations. ...
Weather. ...
Interest rates and the US dollar. ...
Speculation.
What makes commodity prices fall?
As the supply and demand for commodities change, the price of the commodity will also change. The fundamental rule is that commodity prices will rise with increasing demand. ... On the flip side, the price of a commodity will fall when faced with decreasing demand and increasing supply.
Explanation: