This week saw news about what could be the coldest winter many of us have seen in quite some time. Last weekend Goldman Sachs released new information forecasting boosted oil demand this winter season, triggered by an expected colder winter in Europe and Asia. Because of a potential global increase in wholesale power and gas prices, analysts are warning of higher winter energy bills to come. Old Farmer’s Almanac has even suggested that this winter be called the “season of shivers,” referencing the above-average snowfall and below-average temperatures expected to follow the winter surge. In particular, the outlook expects much of the South and western U.S. to receive abnormal winter conditions, especially with dryness in these regions.
Major headlines this week also reported that saw prices dropped significantly following shockwaves caused by Evergrande, a Chinese real estate behemoth. The company, which owes $300 billion to its partners and earned just $8 billion this year, has seen its stock price fall 85% over the past six months. Some have compared their financial woes to the Lehman Brothers’ collapse in 2008, which precipitated the Great Recession.
Lastly, we talked about whether or not “normal” oil conditions are within sight. After all the market has been through with the pandemic and with storm season affecting fuel prices, things seem to be moving upward. Overall fuel demand has now been restored to pre-pandemic levels, where supply has come in at almost 21 million barrels per day. While the market has a long way to go, with oil supply and demand starting to reach normal numbers, there is a very positive outlook going forward.
Prices in Review
WTI Crude opened the week at $71.92. Prices rose steadily throughout the week, with today hitting its highest number. Crude opened Friday at $73.24, an increase of $1.32 from Monday.
Diesel opened the week at $2.2109. Similar to crude, diesel increased throughout the week other than the from Monday to Tuesday. It opened Friday at $2.2459, an increase of $0.035 from Monday.
Gasoline opened the week at $2.1781. Prices were volatile this week with Monday being the highest price. Gasoline opened Friday at $2.1653, down $0.0128 from Monday’s opening price.