Oil is the commodity in focus right now

Oil prices started falling on June 3 after the OPEC+ conference, where the eight member countries agreed to extend cuts into 2025.

The price of West Texas Intermediate oil fell from a recent high of US$86.91 a barrel in early April to where it currently sits at around US$76. Closer to home, Western Canadian Select has dropped from a high of US$72.99 in early April and now sits at about US$62. What is behind this price drop and what is the outlook for the commodity?on June 3 after the OPEC+ conference, where the eight member countries agreed to extend cuts into 2025.

Over that time period the price of WTI has been between US$4.34 and US$45.93 higher than the price of WCS. The average spread between WTI and WCS for the past five years is US$15.85 a barrel. Both transportation costs and grade account for the majority of the price difference. According toin transportation with another 27 per cent used for industrial heat or power generation. The balance is used in residential or commercial heating.

World oil supply is projected by the IEA to increase by 580,000 b/d in 2024 to a record 102.7 million b/d as non-OPEC+ output rises by 1.4 million b/d while OPEC+ production falls 840,000 b/d, assuming that voluntary cuts are maintained. Gains of 1.8 million b/d are expected in 2025 as non-OPEC+ adds a further 1.4 million b/d.expects to see 17 million electric vehicles sold in 2024 or 20 per cent of total car sales for the year.

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