NORTHAMPTON, Mass. (WWLP)- Crude oil prices have been going up and down over the last couple of days. They went down over 7% Tuesday.
Just a week ago oil plummeted below $38 a barrel, Monday it soared to $49- a 30% rise in three days. Tuesday it took another dive and ended up at $45 a barrel.
The drop in crude oil prices comes amid concerns about Chinese economic growth. China is the second largest consumer of oil in the world and speculators are trying to gauge how much oil they will need in the future.
Jim Brennan, of Florence said, “Well I think if the speculators would have to take delivery of it instead of a piece of paper saying they own it then maybe the gas prices would stay down.”
The U.S. government downgraded its estimate for the oil that would be produced stateside this year. OPEC also said they may be willing to cut back on production. But right now economists are saying the volatility’s being driven by speculators and those gambling on buying low.
The volatility on the market hasn’t had a dramatic impact on the prices at the gas pump yet, but the fluctuating estimates of future crude oil production has some New Englanders worried headed into the colder months.
John Leary, of Florence said, “Well we would like it to keep going down and in the colder months maybe it would stay down, because the oil prices are going to be going up so…”
Analysts are waiting for the crude oil market to correct and stabilize.
Ruben Nunez, of Florence said, “It does affect the bottom line as far as savings and a good chunk of it can be used for elsewhere.”
The concern is: higher oil prices would only encourage more drilling, resulting in more oil coming on the market.
If the U.S. deal with Iran is approved next month, it could bring even more oil to the market.