Current oil prices and supply disruptions are causing prices of coconut oil to fall below $10 a barrel, but experts say it’s too soon to declare the oil market dead.
“The fundamentals of the oil markets remain strong,” said Paul McNeill, head of global oil and gas strategy at IG in Sydney.
The oil market has been in free fall since the global financial crisis, when global demand for oil surged to a record high.
Demand for oil fell in the U.S. in 2015, but has recovered to levels similar to when the oil crash first hit in 2009.
Oil has surged back up since the crisis.
The Organization of Petroleum Exporting Countries, or OPEC, agreed to cut output last year and cut output in 2020.
At the same time, demand for petroleum products is still rising in China and South Korea, and has been climbing in the Middle East and Africa.
While the market for coconut oils is recovering, demand is likely to remain low for the foreseeable future, McNeill said.
McNeill expects oil prices to continue to fall until 2018, but predicted that prices will continue to rise at the end of 2018, when oil prices peak.
Crude oil is used as fuel for automobiles, power generation, heating and transportation.
It has been a mainstay of the global economy for over a century.
The price of a barrel of crude has risen steadily since 2008, and is up to $100 in recent years.