Oil Prices Start November Off With A Turbulent Ride

It’s been a turbulent start to November for oil prices, which over the past week have traded as high as $85 per barrel, and as low as $78. West Texas Crude was trading around $82 in Monday’s action.

Why the volatility?

OPEC decided to stick to its guns and increase oil production slowly, by the agreed to 400,000 barrels to start the month of November. Patrick DeHaan with GasBuddy added it appears the energy crisis in China that’s been building for several months, has been addressed, somewhat.

“China has been buying up all sorts of natural gas, crude oil and coal, and its been doing a good job, and so the energy crunch in China has faded as China has had some success in sourcing additional supplies, but, still we are close to being on the cusp potentially more issues in China throughout the winter.  So, if we get some cold weather that certainly could bode poorly for China.”

DeHaan said talk of President Biden tapping into the strategic petroleum reserve have some wondering if oil prices will drop; but no official word has come from the Administration. The biggest question DeHaan noted that will impact oil prices in the coming months, simple demand.

“Will we continue to see global growth with it comes to the global economy, or will things finally start to cool off?  Consumers have seen a tremendous amount of demand and has brought a tremendous amount of demand to the global market.  I don’t know if it will continue, but I certainly think watching holiday spending will be critical to knowing how high demand for gasoline will go in the months ahead.”

Some have speculated that oil prices could crack the $100 mark this year, but DeHaan says he does not see that happening at this point. What are some of the other issues DeHaan will watch when it comes to the price of oil?

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