Wyoming Economist Says Production Cuts, Demand Driving Oil Prices
Jim Robinson says prices in November for West Texas crude went up to a little over $56 per barrel. That was an increase of about $5 per barrel from October of 2017 and $11 from November of 2016. Robinson says the price has been steadily increasing in recent months, adding the higher prices ''seem to be sticking.''
He says the first factor driving the price increases is a worldwide increased demand for oil, which is not limited to any particular country or region. He says the other critical factor is that an agreement among members of the Organization of Petroleum Exporting Countries (OPEC) is being adhered to so far.
Robinson says that hasn't always been the case with such agreements, and the fact that OPEC is discussing extending those production cuts even further bodes well for future oil prices.
The situation is leading to a decline in worldwide oil inventories, and Robinson says U.S. oil producers are ready to step up oil production if the further OPEC cuts become a reality. He says based on how things look right now, he expects oil prices to at least hold steady, if not increase, over the next few months.