Starting off the week we saw oil prices decrease on new expectations of increasing energy supplies. With United Nations talks ending on Saturday, news circulated of a deal pinning global warming heavily on fossil fuels. The two-week meeting in Scotland focused specifically on climate change, and several sessions focused on how to curb emissions enough to limit environmental impacts. Click Here to read more about what was discussed.
Consumers received a positive headline when the IEA suggested that prices could improve. Their report notes, “The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon.” Although demand is rising quickly, oil supplies have been rising just as quickly, including the US’s post-hurricane rebound. Next year, US production will account for 60% of annual supply increases, assuming OPEC+ sticks to current plans. Learn more about what the IEA said in their report here.
Lastly, the United States, China, and other world powers agreed to a strategic oil release in order to help curb the price of fuel. As we noted last week on “How A Strategic Reserve Release Affects Prices,” although the US Strategic Petroleum Reserve cannot single-handedly effect change, it can when combined with the strategic reserves of other countries. President Biden has called on other major economies to begin releasing their oil, and some are agreeing. Markets sank this week after China announced plans to release oil from their strategic reserves.
Prices in Review
WTI Crude opened the week at $80.66. Prices decreased steadily throughout the week, hitting a low on Thursday. Crude opened Friday at $78.76, a decrease of $1.90 from Monday.
Diesel opened the week at $2.4010. Diesel was extremely volatile this week, with many changes. It opened Friday at $2.3800, a decrease of $0.021 from Monday.
Gasoline opened the week at $2.3110. Prices increased earlier in the week until Thursday when they pulled back. Today prices are up again with gasoline opening at $2.2969, down $0.0141 from Monday’s opening price.
