The Price of Oil

[TheWorldNewsOrg]

If you’re not an oil analyst, the oil market may seem like a lot to keep up with. But it’s really controlled by these 3 things. https://t.co/Tj7ytqVeU2 pic.twitter.com/aatkq2cH87

— CNBC (@CNBC) September 23, 2018

 

[Money & Finance]

...literally. U.S. crude oil fell into bear market territory yesterday, down more than 20% from what was a four-year high set last month. It also happened to be the ninth consecutive day of losses.

Crude prices have been slumping for the last five weeks. Wondering why?

1. Key producers are ramping up output. U.S. output hit an all-time high of 11.6 million barrels/day last week, per the Energy Information Administration (EIA). It estimates the U.S. is now the world's No.1 crude oil producer.

• Plus, Saudi Arabia and Russia (the other top producers) have also been boosting production since the summer.

2. Is demand deteriorating? The EIA reported U.S. crude stockpiles increased for the seventh-straight week. When those stockpiles grow, some oil traders get spooked about demand at current prices and sell their positions...leading to a price decline.

3. Geopolitics are shaking things up. The Trump administration reimposed sanctions on Iran earlier this week...but announced waivers for eight countries, allowing them to keep importing Iranian crude for the next 180 days. You can put your fears of a supply squeeze to rest.

[TheWorldNewsOrg]

Feels like up until today, there's been a red arrow tattooed next to "OIL" in the Brew's markets section for weeks—crude prices did slump to their lowest in more than a year on Friday. But is that good? Or bad?

In one corner, the WSJ:

Their thinking? It's not 2014-2016 anymore.

Follow us, here...A couple years back, supply ballooned (h/t shale production), prices fell, and investment dried up. Places like Texas and North Dakota suffered job losses, which in turn soured consumer spending. That was tough on the economy.

But that's not the case with this price drop...because 1) the oil industry now has a better handle on shale production 2) it reps a smaller share of capital spending in the economy and 3) it employs far fewer people. So feel free to enjoy the low prices at the pump without worrying about the economy caving in.

In the other corner, NPR:

Their thinking? A drop in oil prices is one thing (it's been a boom-and-bust industry since the first well was drilled in 1859)...but a drop in oil prices plusa stock market decline? That could signal global economic softening.

It could also ratchet up tensions ahead of December's OPEC meeting, when production cuts will be in the spotlight.

[Money & Finance]

Here is a snapshot from 2020 during the pandemic:

Amazing to see it go down to 21 a couple days ago.

I see the phrase above "Global economic softening"..... LOL..... can you say CLIFF?!?!

 

[TheWorldNewsOrg]

Earth’s other precious liquid, oil, hit recent record highs this week ($128 USD per barrel), although they dipped a bit since. Rising oil prices will help authoritarian governments (Gulf States, China, Iran, USA, Kazakhstan, etc) stay in power and increase CO2 levels. It’s a lose-lose.

[Mic Drop]

OPEC+ cuts oil production 

Fuel prices are set to rise even further with unplanned cuts to oil extraction, as OPEC+ is allegedly considering. As Europe struggles with energy for the long, nuclear? winter, the green transition may never arrive. Coal demand is up, and prices are the highest they’ve been since 2005.