Five months ago, a prominent commodities expert told me that oil prices would move higher. The market has been extremely volatile since then, but that prediction has in fact panned out. So I sat down with him again to get his take on the outlook for oil prices and the economy in general. Also, readers weigh in with their tips and observations on woodstoves as a follow-up to my last issue, which discussed heating with wood.
Oil Prices: Grinding Higher
Back in April, I sat down with Jason Schenker, president of Prestige Economics of Austin, Texas. At the time, benchmark West Texas Intermediate crude oil was trading at $40 per barrel, after rallying from about $26 per barrel during the winter. Jason predicted that while the U.S. energy industry would continue to suffer from depressed oil prices, WTI would gradually head higher as production fell. Flash forward five months, and that is about what has happened: U.S. oil output is down from about 8.9 million barrels per day in April to roughly 8.5 million barrels per day now. A slew of firms have gone bankrupt. And after some big spikes and swoons, the price of crude has climbed from $40 per barrel to about $44.
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