Oil Prices Should Remain Stable for Remainder of 2018
Both Saudi Arabia and Russia are discussing terms to jointly increase oil production. Russia and OPEC agreed to a temporary deal two years ago to tighten oil supplies. This deal has chipped away at the excess supply of oil that has been in the markets for years. As a result, the price of oil has risen from a low of $25 per barrel to the current price around $70 per barrel. The news that Saudi Arabia and Russia may increase oil production again caused the price of oil to drop about $3 per barrel. Barring any geopolitical risk, oil should remain in a range of $60-$80 per barrel for the remainder of the year. This would be good news for most of the major oil producers as they are profitable with oil prices above $50 per barrel. The energy sector of the S&P 500 index has been one of the best performing sectors so far in 2018.