Oil prices, and thus gas prices, might see another slump down to historic levels if the oil-producing nations of the Middle East can’t come to an agreement on slowing production.
The Organization of Petroleum Exporting Countries (OPEC) is trying to hash out an agreement to slow production of oil given the low price. If OPEC can lower the production, and thus the supply, prices will rise back up to profitable levels.
But all of the OPEC nations want a bigger part of the market share and they are trying to negotiate exemptions from the agreement before the group finalizes it on Nov. 30 in Vienna. If the group can’t come away with a deal, production will continue to spike and prices will continue to drop.
Iran, Nigeria and Libya think they should have an exemption because they are still trying to recover from sanctions that halted their production. OPEC has conceded that they might allow these exemptions.
Iraq argues that they need an exemption from production cuts in order to fight against ISIS. Curtailing exports could strangle one of the only funding sources the country has to fight the Islamic State.
But if enough exemptions are granted, then OPEC can hardly hope to slow production to the point of increasing prices.
The original possibility of an agreement helped bump oil prices to a 15-month high above $50 per barrel, but if OPEC can’t actually follow through on this possible agreement, prices are likely to slump again.
Crop prices (Oct. 31)
Rio Creek Feed Mill – Algoma
|Commodity||Price (per bushel)||Basis|
|New-Crop Wheat (SRW)||$3.78||-0.80|
Fox River Valley Ethanol – Green Bay
Basis: The difference between the local cash price for a commodity and the Chicago cash price (where the Board of Trade sets national futures price).
Gas Price Averages
United States: $2.21
United States one year ago: $2.18
Wisconsin one year ago: $2.33
Northern Door: $2.24
Sturgeon Bay: $2.21
Gold: $1,275.70/troy ounce
Silver: $17.83/troy ounce
Sources: aaa.com, agweb.com, gasbuddy.com, money.cnn.com, Bloomberg Markets