Market Update – 11/24/2021
The White House took actions this week in response to rising oil prices. Domestically, the Federal Trade Commission was asked to investigate whether oil companies have manipulated prices. Internationally, China, India, and Japan were called on to release stocks of crude oil. So far, China has cooperated with releasing crude oil inventories which has led to a drop in crude oil prices.
From the perspective of supply and demand, the rise in oil prices is caused by unchanged energy supply in conjunction with the sudden increase in energy demand from the waning epidemic.
The reason OPEC did not increase production was due to the uncertainty of pandemic recovery—whether the situation would rebound or suddenly worsen. Meanwhile, US oil shale companies were unwilling to increase production due to pressure from investors.
