Over the summer of 2023, hedge fund buying helped to lift crude oil prices. Now that summer is ending, money managers have sold the equivalent of roughly 30 million barrels in petroleum futures.
The oil market has been impacted by production cuts in Russia and Saudi Arabia. Meanwhile, the intense heatwave across the United States caused above average gas consumption as people used their air conditioners to try to keep cool.
Current predictions anticipate that oil prices will fall as sanctions on oil exports from Iran and Venezuela relax. El Nino could bring a mild winter to the United States, which would limit the gas used for heating homes. According to Reuters, “If temperatures are above the long-term seasonal average, prices will have to remain lower for longer to enforce a corresponding reduction in drilling and production to keep inventories within storage limits.”