Eagle Ford Minute by Randy Watson
West Texas Intermediate crude oil has been in a downward trend since it hit a high of over $107 per barrel in mid-June. Front month futures were near $93 on August 21.
At the middle of this year, there were multiple factors that pushed global crude oil prices higher.
- Insurgency in Iraq
- Ukraine conflict with Russia
- Israel-Gaza conflict
Threats still remain, but prices are down, so what’s changed? Possibly, the Libyan supply, although not at Qaddafi-era levels, has restarted in leaps and bounds. As a result of the agreements between various elements, Libyan supplies now stand almost four time what it was in early June.
The shale and fracking induced boom in the U.S. has pushed crude oil production to a 27-year high. Also, booming Canadian supplies of heavy oil to the U.S. have also added to this rapidly increasing supply.
So, crude oil that used to be imported into the U.S. need to find a new buyer. All this adds up to a recipe for a price decrease.
More Details: Falling crude oil prices