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A few days ago, I shared a survey where I asked for your feedback and questions. (you can still take part by clicking here)
One of our readers recently posed a great question:
"Why is the oil and energy movement not what everyone says? It seems to have stopped in its tracks."
Let’s delve into this topic to shed some light.
The current weakness in oil prices is primarily due to surpluses.
According to the latest reports from the Energy Information Administration (EIA), we’re looking at a 19 million barrel surplus in crude oil and a 4.8 million barrel surplus in gasoline.
As you might expect, Economics 101 is at work here.
These surpluses are applying downward pressure on prices.
Adding to this, OPEC’s actions play a crucial role. While OPEC has indeed made production cuts, they’ve announced plans to phase these out over the next 12 months.
This means we could see an increase of 2 million barrels per day over the current output.
The market is already anticipating this future supply, contributing to the current price stability.
Understanding these dynamics is essential. The combination of existing surpluses and the planned increase in production by OPEC are key factors keeping oil and energy prices from rising as one might expect.
So, what does this mean for us as investors and consumers? It means we need to stay informed about these market forces.
Keeping an eye on EIA reports and OPEC’s announcements will provide insights into future price movements.
As always, I’ll keep you updated with the latest insights.
And be sure to fill out the survey so I can answer any market questions you have.
— Geof Smith
PS> Oil might be waffling for the foreseeable future, but uranium is another story.
Click here to check out what I see.
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