All Posts Tagged: OPEC

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 ›

Investment Insights: Don’t mix politics with pleasure

Wade Balliet
Posted by Wade Balliet
Investment Strategy
Capitol in Washington, D.C., as dusk arrives and lights illuminate the building, with its reflection in a pool in the foreground.

While the two heavyweight contenders praised themselves and traded verbal blows, the markets have been churning on lackluster economic data coupled with a divided Federal Reserve.

Read More ›

Investment Insights: So the joke starts like this…

Wade Balliet
Posted by Wade Balliet
Investment Strategy
Young man (seen from side/rear view) looking at two large computer monitors showing various market data tables.

Financial markets are still moving sideways as investors await data or news substantial enough to show whether stock prices will continue higher.

Read More ›