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The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil tumbled
in August, falling $7.05 to $96.54 per barrel. That price drop coincided with a
slightly stronger U.S. dollar and the lagged impacts of a 317,000 barrel-per-day
(BPD) increase in the amount of oil supplied in June (to 18.8 million BPD), but
occurred despite further reductions in crude stocks. The monthly average price
spread between Brent crude (the predominant grade used in Europe) and WTI expanded
by $1.89 in August, to $5.07 per barrel.
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ASPO-USA’s
Tom
Whipple chalked up the nearly $10-per-barrel July-August price drop to “increasing
U.S. shale oil production, which is largely offsetting disruptions elsewhere;
weaker demand for oil from China; and the growing belief that neither the
worsening Middle Eastern situation nor the Ukrainian - EU standoff would lead
to disruptions in oil supplies in the immediate future.”
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The foregoing comments represent the
general economic views and analysis of Delphi
Advisors, and are provided solely for the purpose of information, instruction
and discourse. They do not constitute a solicitation or recommendation
regarding any investment.
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