US: EIA Crude Oil Stocks Change at +2 million in week ending September 4
Oil and Gas US: EIA Crude Oil Stocks Change in Week Ending Sept.4, 2020, has been the topic of discussion amongst energy analysts in a number of recent reports. On one hand, analysts are saying that the stock prices were on the rise due to oil prices at the time of its initial spike when prices hit their highest ever. However, it is noted that the price went down by two percent from the original level in the period between Sept.1 and Sept.4 and investors have turned their attention elsewhere.
While some analysts say that the fall in oil prices may have been caused by a technicality, others are pointing out that there are no reliable and verifiable data for the level of the oil prices as this falls outside the regulatory frameworks. As per the law, data should be shared by the Federal Reserve so as to help the American economy. If the United States fails to meet its energy production targets, the economy will suffer a heavy blow and a negative effect on the overall economic picture of the country.
On the other hand, there are reports that say that the drop in energy sector prices will also have an impact on the American economy and the US: EIA Crude Oil Stocks Change in Week Ending Sept.4, 2020 report has highlighted some interesting facts that suggest the impact of this drop on the American economy. Among the observations in the report, it is said that; The prices of gasoline and oil rose in the month of August which can create more demand in the near future.
The new demand can take place through imports from Brazil, the OPEC member. Also, the increase in the price of oil is being felt in countries such as India. According to estimates by the International Energy Agency (IEA) of the United Nations, India will need an increase in their energy consumption by around 8 percent in order to meet its increasing energy needs. The IEA, it is observed, is expecting increased demand from the Middle East in the coming years.
With a rise in demand, the oil sector also saw a rise in prices, which may continue for a few more weeks before they start to fall again. In fact, the prices of oil have fallen by more than one hundred dollars per barrel in just one day and the market is expected to return to its normal levels at some point. However, experts suggest that the initial jump in prices cannot be sustained for long because the fundamentals like the drop in production and demand will take over soon.
This means that oil prices have to fall back down to their average levels and then come back up again. Some analysts believe that this can happen within a few months. This also indicates that the market is experiencing a fundamental problem and it is not likely that the market is going to experience a long-term rise and fall for a long time. This indicates that the US: EIA Crude Oil Stocks Change in Week Ending Sept.4, 2020 report is accurate in predicting that the market is facing a long term trend and may not go much above the average level.