If we have learned anything in the past few years, it’s the fact that no one can predict the future of oil prices. It seems to be a guessing game with an ever increasing number of variables. However, there are a few indicators that we can look at to estimate wisely.
CNBC released an article today discussing the impact OPEC and Saudi Arabia have over the price of oil. Stating that the upcoming meeting in Vienna will likely have less on an impact on the price of oil. “After oil touched $50 per barrel for the first time since November, investors remain focused on the potential outcome of this week’s OPEC meeting in Vienna. However, one of Wall Street’s most closely followed analysts has a clear message: The event is meaningless.”
The Fed’s decision to raise interest rates may have an impact on oil, and general consumer demand. Higher interest rates will have a negative effect on the oil industry as money strapped oil producers deal with higher interest rates and less easy money.
Several supply disruption’s we have faced the past few weeks seem to be dissolving, as traders are focused again on and copious supply of fuel in the forecast. Wildfires in Canada and conflicts in the Middle East and Africa are making less waves in the news.
All this being said – many traders are expecting Crude prices to bounce around near the $50/bbl range for the coming months. Crude is down .30/bbl at $48.80/bbl around 1pm today with Gasoline futures down .0032 to $1.6102 a gallon. Diesel futures are trading down .0008 at $1.4963 a gallon.
Be looking for some additional direction tomorrow afternoon as the EIA releases its weekly inventory data.