Price At The Pump: Oil Prices Expected To Drop In Remaining Weeks

Oil prices started this holiday shortened week moving lower. And there’s a couple of reasons behind that dip.

Patrick DeHaan with Gasbuddy.com said talk of a potential peace deal between Ukraine and Russia, brokered by the United States encouraged oil prices to dip. However, DeHaan has his doubts.

“On the depth of it, it may sound like a terrific option, but when you get into the weeds, it again looks like this deal is potentially very favorable to Russia and is questionable as a result if it will move forward or not," DeHaan noted. "But it's enough to send oil prices lower on the hopes that a peace deal could unlock more oil flowing out of Russia.”

OPEC Has Tried This Before

In addition to that, DeHaan said OPEC is looking at increasing oil production.

“Now infamously here, a couple of years ago in 2023, OPEC decided to again reverse its trend of producing less oil. And now they've given up on that trend in light of the fact that it has failed really to stem low oil prices. So, they're trying to recapture the market share," DeHaan said. "They're clearly willing to accept a less of a price per barrel, and it might be another year or two, and they certainly could switch their policy yet again. So, OPEC continues to tinker with policy and seeing how the oil market is driven. For now, OPEC has been concentrating on increasing oil production even at the behest of the price of oil.”

As of Tuesday morning, both West Texas Crude and Brent Crude were trading lower, with West Texas Crude hovering around $58 per barrel, while Brent was closer to $63 a barrel.