Oil prices aren’t nearly as low as they were earlier this year. You might be wondering if further increases are ahead. While it’s tough to predict oil prices for a number of reasons, including because prices can be impacted by geopolitical events largely unrelated to fundamental principles of supply and demand, one could make the case that oil prices are destined to remain relatively low over the foreseeable future.
As reported by Bloomberg, that’s because the world is awash in oil and additional supply is coming online. For instance, Nigerian production is ramping higher after months of disruption. The Nigerians anticipate pumping about one point eight million barrels a day, up from the three decade low of one point four million barrels attained in August.
Russian production is up by five hundred thousand barrels a day relative to August and the first barrels from the fifty billion dollar Kashagan field have begun to flow in Kazakhstan. There are also indications that the recent increase in oil prices has also led to additional drilling in the United States.
Given expectations for ongoing slow global economic growth, chunky increases in oil and gasoline prices have become a bit less likely.
