Price of Oil Lowers After Government Reports Reserves
Its simply a matter of supply and demand, and it seems we have a surplus of oil supply that is allowgin for reasonable prices for oil. Sure you can argue that we can’t always expect such low prices for gas since inflation is a constant and what not, but whether supply is being manipulated to influence price it’s a strange event anyway.
As a side note, I wanted to point out this nifty graphic of what exactly ou get with a barrel of oil. you always hear from people, “Oh you should buy oil,” but what ticker is that? Simply energy commodities? OPEC? *shiver*
According to a report from the Energy Information Administration, there is an extra 1.5 million barrels laying around that we didn’t really account for. On top of this excellent news, it might take a lot of wind out of the sales regarding that whole Russia vs Ukraine issue. And going back to OPEC, they have agreed to cut production to start increasing prices so better start to fill up! (JK, not a good idea.)
Oil prices have climbed 43% since reaching a five-year low of $33.87 a barrel on December 19, 2008. $
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Comments
My hypothesis is that at the first sign of economic recovery, oil under $50 will seem like a distant memory. I don’t think it’ll take too terribly long to see prices like we did last summer.
You should check out Vanguard Energy ETF (VDE). It’s how I’m playing the broad fossil-fuel industry that’s really beaten up right now.
This is nice to hear & hope this will continue for a long period.
Rose.