Oil & Gas

Oil prices are remaining relatively stable as global markets continue to find a balance between production and consumption. Following a recent meeting, OPEC announced plans to increase oil production by approximately 180,000 barrels per day starting in October. Despite the added supply, experts say the global economy is effectively absorbing the additional oil, preventing any sharp changes in pricing.

Patrick DeHaan of GasBuddy.com noted that oil inventories in OECD (Organization for Economic Co-operation and Development) countries have only seen modest increases. This suggests that rising demand is keeping pace with the uptick in production. “It does look like as OPEC has increased oil production, the market through increased consumption has been absorbing a lot of it,” DeHaan said. He anticipates oil prices will likely remain in the low $60-per-barrel range for the near future.

For drivers, the outlook on gasoline prices appears positive. DeHaan predicts a drop in gas prices in the coming weeks, thanks not only to the additional oil supply but also the seasonal shift in the U.S. to cheaper winter fuel blends. These blends are less expensive to produce and typically cause gas prices to decline during the fall months.

However, diesel users may not be as fortunate. With harvest season underway, farmers are expected to increase their diesel usage, driving up demand. Additionally, as colder weather approaches, heating oil consumption is set to rise. Since diesel and heating oil are essentially the same product, this seasonal demand could put upward pressure on diesel prices in the coming weeks.