The price of crude oil is in the price of everything. The average person shopping for fresh greens often doesn't think about the truck which delivered fresh greens to the supermarket. This truck uses diesel fuel - which is distilled from crude oil.
WTI Front Month contract decreased from about $80 / barrel (mid January 2023) to $68 / barrel (mid March 2023)
But it's likely that the price of oil will increase. There are two developments that TerraManta is closely monitoring.
According to Princeton Policy Advisors, the US shale oil production has been largely flat during the last four months.
According to Joint Organizations Data Initiative, global oil production fell by 365,000 barrels per day in January 2023 - or a seven-month low.
What will happen if the global oil production continues to decrease and US cannot increase its own production to fill the gap?
Russia's oil production has also decreased
A month after the G7 price cap and the EU embargo on seaborne Russian crude imports took effect, crude oil production in Russia was down by 47,000 bpd to 9.98 million bpd in January. This was the lowest Russian output in three months and 277,000 bpd below the levels from January 2022, according to the JODI data.
The demand for oil will increase during the summer
... as it always does.
The return to basics
If you are interested in whether inflation will continue to rise, become more interested in oil futures and other commodities.