Oil. This commodity has been a talk of the town for several months in a row.
A lot of things happened that could easily undermine the whole industry. But things went quite in the beginning of October, when we saw oil prices reach the highest level in four years. Although our joy wasn’t long0lived as ever since the beginning of November we see the fall of the price?
So, is it worth investing into oil now, or should we stay away from the commodity?
Well, we are as far away from the stable situation as we can possibly be. OPEC is still struggling and fighting for the lowering of the output numbers, all the while the countries, members of OPEC are fighting for increase of the output – for example Russia and Saudi Arabia.
Both WTI and Brent futures are falling down at the moment and as the OPEC+ countries are preparing to meet in Vienna in the beginning of December I wouldn’t say that we are getting closer to some sense of the situation at all.
Oil right now is extremely far away from earning the name of a somewhat stable asset. Sides of the extractions cannot agree on the output numbers. With prices falling down so rapidly it is only natural that OPEC is going to try and fight for the output to be lower, that it is right now. But countries. Like abovementioned Russia, the earnings of which fully depend on oil export numbers are understandably against the correction.
And there we have it – two strong sides, each pulling the cover in their direction. And we are the ones who suffer from it.
Is it worth and safe to invest into oil at the moment?
I wouldn’t say so. Those, watching the price closely can see and confirm that morning and afternoon performance of the assets are totally different things. We can see the growth in the morning and then see a rapid fall in the afternoon and another growth wave in the evening.
And here I am not talking about 0.1-0.3 percent movements. Those are actually fine in the markets. I am talking about changes that add up to 2 percent at a time. And that is with both of the major crudes.
We are the ones who suffer from it.
In the nearest future, unless we see some kind of consensus between the countries, we are going to be the victims of such turbulent performance.
For now, WTI added 1.83 percent and costs $54.41 per barrel, Brent with 1.79 percent addition costs $63.65.