Recent unprecedented attacks on the Arabian oil infrastructure have sent tremors across the global business sector. With gallons of oil wasted and equipment destroyed, the resultant supply crunch has set the crude oil prices soaring to a double-digit glory. There is no doubting the fact that the crude oil market is the mother of all significant industrial sectors that keeps the global economy thriving! Therefore, it will be no exaggeration to infer that with the oil price forecast stating an upward flight, most of the critical industries will struggle on a slippery slope.
How Will the Current Industrial Scenario Look against the Backdrop of the Oil Price Forecast?
The recent price hike in the crude oil market will have a chain impact on some of critical industries such as the stainless steel, industrial gases, fuel oil utilities, among others. Crude oil serves as one of the key ingredients that is required for the production of commodities and functioning of the infrastructure of the industries mentioned above. Heavy reliance on Saudi Arabia’s crude oil market will create a severe supply crunch across these industries and across several geographies. Oil price forecasts across these regions will hint at a substantial rise, which will consequently increase the cost of operation across the end-user industries.
The crude oil market is expected to experience extreme volatility in the coming years. Request free access to our platform to get real-time pricing insights into this market and know what how it will impact some of the major industries discussed above
What will be the Fate of the Suppliers in the Stainless Steel Industry with Forecasts of a High Crude Oil Market Price?
Most of the regional and the global stainless steel manufacturers will operate on lower profit margins. A stark increase in the crude oil market price, as indicated by SpendEdge’s recent oil price forecast for 2019, will propel utilities costs, including for fuel and lubricants. Such hikes in the utilities prices will drive the manufacturing and logistics expenditure for stainless steel manufacturers. This will compel them to increase the prices of end products to compensate for their manufacturing expenses, owing to the increase in the crude oil market price.
This procurement intelligence report analyzes the impact of the cost drivers on the stainless steel price on a global scale. This report backs the price trends with actionable insights into stainless steel strategic sourcing practices that can help buyers achieve cost-savings in the global stainless steel market.
Buyer’s Ordeals Faced in the Industrial Gases Market owing to the High Oil Price Forecast in the Crude Oil Market
The increase in the crude oil market price will have a direct impact on the industrial gases market prices as this utility is critical for the operation of industrial gas suppliers. It will also increase the gas production expense and product delivery expense of suppliers. Such a scenario will ramify into recurring procurement expenditures for buyers in the industrial gases market in the backdrop of the volatile crude oil market price.
Granular insights into industrial gases sourcing and procurement strategies are offered in this report that will help buyers optimize their spend and identify avenues where they can save costs. This report also analyzes spend accelerators that will have significant impacts on the industrial gases spend management goals set by buyers.
What are the Steps that Leading Industry Players are Taking to Address the Increasing Crude Oil Market Price?
While making peace with the fact that any global or regional incident will tend to unsettle utility costs to a major extent, it is prudent of buyers to take the necessary steps to survive in the crude oil market.
On that note, SpendEdge’s recent procurement intelligence report on the stainless steel market states that buyers must include appropriate price collars into their contracts to offset the high volatility of the crude oil market price. In the stainless steel market, it is imperative for buyers to rely on statistical data of recent price deviations to fix a price collar and avoid the negative impact of any increase in the crude oil market price.
For the industrial gases market, suppliers are expected to focus on effectively forecasting the demand from buyers. Such predictive insights into buyer’s requirement will enable suppliers to optimize the efficiency of their own raw material supply chains and set up long-term raw material procurement contracts with their raw material vendors. This would help them to achieve cost savings. This will aid buyers address the rising oil prices in the crude oil market as indicated by the recent oil price forecast.
To get more insights into the sourcing and procurement strategies for the crude oil market and a list of markets that will be affected by the recent hike indicated by the oil price forecast, get more information from our procurement experts.