Speculation on Oil Prices

The Federal Reserve’s decision late last week not to raise key U. S. interest rates, sent the stock market on another round of speculation. David Pursell, a managing director at investment bank Tudor Pickering Holt & Co. in Houston, said “The market’s not as oversupplied as we think it is. The news out of OPEC is more bullish, U.S. production is falling and demand is great right now.” The week of Sept 15 U.S. benchmark oil fell 2.9% on the New York exchange. But Monday morning, the price was up 2.6% to $45.85 in London. OPEC assumes that production will fall outside the OPEC group and that crude oil prices will raise $5 per year through 2020. However, the market over the past few months shows much more volatility.