NEW YORK — The price of oil is on a wild ride, and there is little agreement on where it’s headed. After falling nearly 60 percent from a peak last June, the price of oil bounced back more than 20 percent as January turned to February.
On Tuesday, it sank 5 percent, closing just above $50 a barrel. Oil has fallen or risen by 3 percent or more on 14 of 27 trading days this year. By comparison, the stock market hasn’t had a move that big in more than three years.
Predicting prices is tricky. Oil price collapses of the past were triggered by plummeting demand or increased supplies. This latest one had both. Production in the U.S. and elsewhere has been rising, while slow economic growth in China and weak economies in Europe and Japan mean demand for oil isn’t growing as much as expected.
Any sign of reduced production inspires traders to buy oil, and new signs of rising supplies send prices lower. In a Tuesday report, the U.S. Energy Department, citing unusual uncertainty, said the price could be anywhere from $32 to $108 by next December.
