All Posts Tagged: gas prices

U.S. Outlook: What’s behind the oil price plunge?

Scott Anderson
Chief Economist

Crude oil prices had been generally rising in 2018 before peaking at $76.24 on October 3.

Large, very clean refinery at dawn. No human activity is visible.Since then, there has been a sudden shift in underlying market dynamics. What’s behind the sharp change in trend?

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Nov. 30.

Key observations:
  • Overall, we believe the increase in oil supply rather than a decrease in oil demand is the primary driver of lower oil prices today.
  • The sudden, sharp, and sustained decline in oil prices immediately reduced the inflation expectations of bond investors.
  • Investors are now expecting lower consumer inflation over the next five years compared to early October, largely as a result of the dramatic plunge in oil and other commodities prices.
  • Bank of the West Economics expects West Texas Intermediate Crude to average $62.50 per barrel in the fourth quarter, and average just $51.50 per barrel in 2019.

Read my full report.

Read More ›

U.S. Outlook: Will inflation come back to life?

Scott Anderson
Chief Economist
Graph showing year over year change in producer price inflation

We will be watching next week’s inflation data for August with a keen interest.

Read More ›

U.S. Outlook: Should we worry about the consumer?

Scott Anderson
Chief Economist
Graph showing up-and-down trends of retail sales over the past several years.

Despite weakness in January and February data, retail sales are still up a healthy 3.1% from a year ago.

Read More ›

U.S. Outlook: Keep one eye on the fundamentals

Scott Anderson
Chief Economist
Graph showing rises and falls - especially recently - in U.S. gas prices.

It’s important to remember that the stock market and the oil market are not the U.S. economy.

Read More ›

U.S. Outlook: Dissecting FOMC intentions

Scott Anderson
Chief Economist
Graph showing monthly totals of jobs created (or lost) in the past 5 years.

The Federal Reserve remained coy in its July statement about when to initiate the first Fed funds interest rate hike.

Read More ›