Price At The Pump: All Eyes On OPEC

Alls quiet on the oil front, that according to Patrick DeHaan with Gasbuddy.com.  He noted geopolitical issues have simmered down substantially, meaning all eyes are on OPEC and their production increases.

“It was a few weeks ago that they decided to raise production for the month of October. That at least temporarily caused a decline in the price of oil," DeHaan said.  "The OPEC again met over the weekend and decided yet again for November to also raise oil production, but by a smaller than expected amount. And that actually has oil prices rebounding slightly this morning.”

As of Tuesday morning, West Texas and Brent Crude were both trading slightly higher, at $61 and $65 per barrel respectively.  But those prices are lower than than the mid-$60 range oil prices were just a week ago.

What's OPEC's Goal?

Why is OPEC increasing production?  DeHaan said while the motive is not 100% clear, one thing that is certain is OPEC can sustain these lower prices.

"And they're really, I believe, after a slowdown in U.S. oil production or an increase in oil revenue," DeHaan said.  "Saudi Arabia had been hoping for oil in the $80s. It's been a long time since they've seen that. So they've kind of resigned to the fact that they'd like to take back some of the market share that they've lost over the last couple of years. And so they're going to try to see what sticks, I suppose. And that is why we're kind of still in the middle of OPEC's increases in oil production.”

Oil Prices Expected To Continue To Move Lower

DeHaan added some industry experts anticipate oil prices could drop below $60 per barrel this winter, thanks to ongoing OPEC production increases.  How could these lower oil prices impact fuel prices, both gasoline and diesel?  Find out by listening to our Price at the Pump podcast:

Remember to join us Tuesday mornings during NW Ag Today for your PNW Ag Network Price at the Pump.

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