Oil has been in the midst of a massive crisis for quite some time, there's no denying it. Since late 2014, the value of the commodity has fallen dramatically, dropping from over $100 per barrel to under $40 per barrel. However, it seems as though we're seeing a glimmer of hope for the commodity. Some of the world's largest oil producers are working together in an attempt to support price growth in oil. Today, we'll talk about why oil fell so far so fast, what countries are working to support the price of the commodity, what we can expect to see moving forward, and how binary options traders can take advantage of the trends.

Why The Value Of Oil Fell So Far

As mentioned above, over the past year, we've seen massive declines in the price of oil, and for good reason. The declines are the result of a global supply glut. Like any other commodity, the price of oil is hat the mercy of supply and demand. When supplies are low and demand is high, we tend to see gains in the commodity. Adversely, when supplies are high and demand is low, we tend to see declines in the value of the commodity. Over the past several years, we've seen massive increases in the production of oil. As a result, the global supply started to outweigh demand. This trend continued until it reached a boiling point. As a result, the value of the commodity declined in a big way.

Changes That Are Causing Gains In Oil Today

Two of the largest oil producers in the world are said to be working together in an attempt to support price growth in the value of the commodity. These two producers include Russia and Saudi Arabia. According to the Russian Energy Minister, Alexander Novak, Russia and Saudi Arabia are in talks with regard to cutting the production of oil in an attempt to support the price of the commodity. According to Novak, each country may cut production by up to 5%, which would help to ease the global supply glut.

What We're Seeing In The Market As A Result

As a result of the news, the value of oil is climbing today in the market. After all, if both Russia and Saudi Arabia decide to reduce their production of oil by 5%, we will see a massive amount of the commodity leaving the supply. As a result, WTI crude oil has climbed to just under $35 per barrel with Brent crude oil beating $35 per barrel.

What We Can Expect To See Moving Forward

When it comes to oil, the forward looking projection is a bit of a tough call. Really, what we can expect lies in what we will see from Saudi Arabia and Russia. When it comes to their plans, both of these countries are seeing economic issues as a result of low oil prices. However, they both have very good reasons to maintain high production on a political scale. With that said, if the deal does go through and we do see a decrease in production, we will likely see strong gains as a result. However, this is not set in stone. So, if the production doesn't decrease, we can expect for the value of oil to head back to the downtrend. 

How Binary Options Traders Can Take Advantage Of The Trends

As binary options traders, it's our job to predict movements in the market. When it comes to oil, this is a bit of a tough job. In the short term, purchase call options in order to ride the trends from the excitement upward. However, make sure you watch developments in Saudi Arabia and Russia closely. If it is announced that the deal between Saudi Arabia and Russia falls through, start trading put options in order to ride the resulting trends down to the profit. Read more financial news by TheBinaryAdvisor.

What Do You Think?

Where do you think oil is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]