Last week we saw another correction in energy prices as quoted in U.S. dollars. Prices for WTI and Brent
crude, as well as diesel, dropped -2%, -5% and -3%, respectively.
• Last week Exxon (NYSE:XOM) released financial results for the last quarter, making its worst earnings report since
2009 as the correction in energy prices overshadowed the company’s cost cutting efforts. This signals a
marked slowdown in the U.S. energy sector and continues to demonstrate the desired effect of an energy
crisis initially launched by Saudi Arabia.
• Once again last week, crude oil overproduction in international markets was identified as the main cause
of tumbling energy prices. According to a Reuters study released on Friday, the OPEC countries
produced over 32 million barrels per day (bpd) in July, or approximately 140,000 bpd more than they did
in June.
• More optimistically for the price of WTI, on Wednesday the U.S. Department of Energy announced that
commercial reserves of crude oil had fallen by 4.2 million barrels; experts had expected an increase of
approximately 850,000 barrels. But this news was unable to slow the decline in the price of black gold,
which over the last month posted its steepest drop since 2008.
• With the low energy prices that we have been seeing lately, now would be a good time to budget part of
your spending on fuel purchases for the next year.