Hopes for a big “freeze” are heating up oil prices — once again.
As one article put it this morning, ‘Hopes for a big “freeze” are heating up oil prices– once again.”‘ The article takes a demand side look at what is moving the market and noted that while two weeks ago oil had fallen below $40/ barrel, it had jutted past $45.50/barrel in the past three days. That would be over a 10% increase in less than a half a week. Again, demand driven even during a slow economic time.
The freeze per se has to do with quota setting that may occur within OPEC and Russia. The scare is on due to sudden meetings coming up this fall with the cartel (in North Africa). This heating of prices may be a bit too early though, and backfire. For one, supply is still robust and in fact the cartel is pumping the most oil ever.
Frackers are starting to get back into the game in mid-America, and refineries have been full. So, this may be a ‘mini-run’ on the market, a kind of half week holiday. Keep an eye though as frost starts to enter the equation in Fairbanks, as the local market is set by local supply and demand! —