U.S. Outlook: What’s behind the oil price plunge?
Posted By Scott Anderson In Economic Outlook | No Comments
Crude oil prices had been generally rising in 2018 before peaking at $76.24 on October 3.
[1]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.
Article printed from Bank of the West: https://changematters.bankofthewest.com
URL to article: https://changematters.bankofthewest.com/2018/11/30/u-s-outlook-whats-behind-the-oil-price-plunge/
URLs in this post:
[1] Image: http://blog.bankofthewest.com/wp-content/uploads/2018/11/refinery_crop.jpg
[2] Read my full report.: http://blog.bankofthewest.com/wp-content/uploads/2018/11/BankoftheWest_USOutlook_11_30_18.pdf
Click here to print.
