Price At The Pump: September Was A Wild Ride For Oil Prices
Nobody may be happier to see the month of September come to an end than oil investors. Oil prices experienced a volatile month, with prices all over the map, wrapping up the month below the $70 per barrel mark. And those prices may continue to move lower, as OPEC looks at resorting oil production levels.
So, why would OPEC want to increase production and lower the prices of oil. Patrick DeHaan with Gasbuddy.com says the effort is being championed by Saudi Arabia.
“Of course, Saudi Arabia has had a lot to lose" DeHaan said. "They've cut oil production, which has led to a big drop in market share for Saudi Arabia, and they're probably eager to claw back some of the market share that they've lost to countries like the U.S. and Canada. And so, it looks like Saudi Arabia may eventually be changing its output and trying to win back some of the market share it's lost over the last year. As that has cut oil production to try and shore up the price of oil, a strategy that hasn't really worked yet. And I think that's why Saudi Arabia is likely going to talk about moving away from those production cuts and trying to increase production to regain some of the market share.”
He noted these lower prices have been welcomed news for U.S. consumers, who are seeing the lowest gas prices in months, and the lowest diesel prices since 2021. As the 4th quarter of the year gets underway, what will be the big issue(s) impacting oil prices.
“Demand globally has been a bit softer, although with interest rates now declining in the U.S. that we could see some growth in overall demand," DeHaan said. "Although GasBuddy data points out that gasoline demand has been pretty anemic, and I think there have been some surprises. Diesel prices, heating oil prices have remained relatively low as we're getting now. Into the cooler weather. That's something that could change, but I think for now there's been a tremendous amount of weakness in the price of oil and that's something that could change here in the months ahead.”
DeHaan added two other issues he will watch in the weeks and month ahead; China’s economy and conflicts in the Middle East.
If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com