Source: Yahoo Finance, data as of 4/15/19
The price per barrel of light, sweet crude oil (WTI, West Texas Intermediate) registered its sixth weekly gain in a row last week, closing out Friday, April 12, at $63.89 per barrel.
Source: Bespoke Investment Group, data as of 4/12/19
The 50% rise in the price of crude oil shown in Figure 2 can be attributed primarily to several factors: (a) the rise in most asset classes since the December 2018 equity market sell-off; (b) some recent indications that fears of a global economic slowdown have been overblown; and (c) most importantly, the dynamics of supply and demand, impacted greatly by production cutbacks initiated last year by the Organization of the Petroleum Exporting Countries (OPEC).
The Wall Street Journal wrote this past Saturday (4/13) on why oil prices are rising, “More fundamental support continued to come from a tightening of global supplies as OPEC goes above and beyond its December agreement to cut production by 1.2 million barrels a day.”
They added that U.S. sanctions on OPEC members Iran and Venezuela also are an important factor in the overall global oil supply tightening.
Investor’s Business Daily reported this weekend,
ETF Trends noted the potential for oil ETFs to head even higher:
Bespoke Investment Group confirms what all drivers certainly know already—gasoline prices at the pump have shot up in 2019. Bespoke says that the average price per gallon of gas in the U.S. has risen about 22% since the start of the year. While prices historically climb toward a summer peak, Bespoke says, “This year’s path has been very similar to the average path, only this year price is up even more than it usually is at this point.”
There is some good news for drivers. Bespoke reports, “Once we get to June, gas prices have typically peaked for the year. They then trend slightly lower during the summer months before really starting to dip in Q4.” (Figure 3)
Source: Bespoke Investment Group
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