NOVEMBER 26, 2018 – OIL PRICES PLUNGE TO ONE-YEAR LOWS: BUYING OPPORTUNITY
The big news in the Thanksgiving holiday-shortened week was oil prices falling to their lowest levels in more than a year following a rapid seven week sell-off. On Friday, oil had its largest one-day decline since July 2015, falling 7.7 percent.
Geopolitics, a weakening world economy, as well as supply and demand issues, have all put a damper on oil prices. OPEC has a meeting set for December 6 where they are expected to announce output will be rolled back. But the prospect of supply cuts is having little effect on crude prices. US oil production levels have been reaching record highs recently, along with more world supplies coming out of Russia, prices have been driven down.
Some analysts feel the fears about market fundamentals are overblown, and the Saudis can quickly solve the oversupply problems. In the meantime, this environment presents an opportunity for investors and businesses to set up commodity hedging strategies to insulate themselves from the inevitable rebound in oil prices. Ask us how we can help.