Last week, I shared with you some basic thoughts on oil and how things might play out with it given the uncertainty of the upcoming election.
Now that I’m back from vacation, I wanted to explore oil a little deeper.
One thing that people are scratching their heads about lately is the price of crude oil.
Recently, we’ve seen crude go from about $82-$83 all the way down to around $75. This drop comes despite some pretty significant draws in our oil inventories over the past month.
In July alone, we had a 24 million barrel draw, with half of that happening just in the first week of the month.
Even with these draws in crude oil and gasoline inventories, several factors are influencing the market.
A major one is China — one of the world’s largest users of oil — which hasn’t fully bounced back economically from the pandemic.
Their demand is still way down, and if we’re being honest as we look forward, this trend looks like it could continue for a while.
On top of that, the global economic environment plays a crucial role.
Factors such as the ongoing war in Ukraine, fluctuating economic growth in other parts of Asia and Europe, and the broader recovery from the COVID-19 pandemic contribute to the uncertainties in oil demand and pricing.
These global factors set the stage for a deeper look into how OPEC’s production decisions and other geopolitical events are influencing crude oil prices, which I’ll dive into tomorrow.
UPDATE: Part 2 is now available here.
— Geof Smith
P.S. This coming Thursday, August 1st @ 1pm Eastern I’ll be sharing a shocking discovery I made deep in the heart of Oklahoma — and how it could be a goldmine for savvy investors. Click here to reserve your spot!
