COLORADO SPRINGS, CO / April 9, 2021 / Reed Cagle has watched the changing oil prices with concern, as these prices are often a gauge of an economy’s health. And as they remain very up and down, he sees that demand is increasing alongside a trend towards higher prices. Is this rebound process permanent or something that needs to be carefully monitored? Cagle’s recent discussion examined these points in depth.
When the Covid-19 pandemic became too obvious to ignore in 2020, Reed Cagle knew that oil prices would heavily plummet. And when this happened, he wasn’t shocked but was concerned. After all, Reed Cagle knows that oil prices are very complex and are a massive part of what drives the market in general, and their plummet was dangerous in a lot of problematic ways.
However, Reed Cagle was also not surprised that oil prices have rebounded to their highest prices since the origin of the Covid-19 pandemic. As people understood this disease more and vaccinations helped increase mobility, Reed Cagle knew that demand would increase and prices would go up. However, he is still unsure if the demand is high enough for the current higher oil prices.
Why is this a problem? Well, Reed Cagle knows that supply and demand are sometimes finicky elements that can vary depending on many factors. For example, he has seen demand go up steadily but isn’t quite sure if it is entirely at the level that oil companies believe. And if it is not, he fears that they may be doing themselves and the world a grave disservice by raising prices too high.
How could this affect the market? Reed Cagle estimates that if people aren’t quite ready to travel as much as oil companies believe, they may be further agitated by higher oil prices. Instead of filling up and getting on the road, they may be tempted to stay at home. And Reed Cagle believes that this will ultimately end up in another plummet in oil prices if this balance is not maintained.
That said, Reed Cagle does anticipate that demand will continue to grow throughout the second half of the year, as the various vaccinations help limit the spread of Covid-19. While vaccination is not a cure, Reed Cagle knows that they’ll make it easier to open up more parts of the country, allowing people to visit their favorite restaurants and stores and feel safer while doing so.
In this situation, Reed Cagle believes that it is crucial to take things slowly and reasonably. Trying to jump up oil prices too soon may result in the imbalanced case described above. While he believes that demand is rising and that it is right to increase oil prices, he encourages restraint and understanding and a willingness to adapt to potential adverse changes, such as higher outbreak numbers.