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Oil Price Certainty? I think not.

Global oil prices tumbled into a bear market this week, down more than 20% from their recent peak. Fear of a global economic slowdown and a decision by the United States to allow some countries to keep buying Iranian crude oil following the reintroduction of sanctions have hit market sentiment. Oil prices remain under the pump on this week following the commodity’s worst single day of trading in several months, as global fears surrounding demand worry investors. Earlier this week, on Tuesday, Oil prices fell by more than one percent after U.S. President Donald Trump put pressure on OPEC not to cut supply to prop up the market. Tuesday’s drop, which saw both Brent and WTI fall about 7 percent, was driven largely by a tweet from US President Donald Trump, in which he urged Saudi Arabia not to cut production. The tweet came in response to Khalid al-Falih, Saudi Arabia’s oil minister, saying the kingdom is likely to cut production by around 500,000 barrels. Oil prices have tumbled into a bear market down at least 20 percent from their October peaks - amid concerns of growing stockpiles. Saudi Energy Minister Khalid al-Falih said on Monday the Organization of the Petroleum Exporting Countries (OPEC), which Saudi Arabia de-facto leads, agreed there was a need to cut oil supply next year by around 1 million barrels per day (bpd) from October levels to prevent oversupply. The United States last week said eight jurisdictions — China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey — would be able to continue buying Iranian oil for six months without fear of US penalties under sanctions on trading with Iran with temporary waivers from the sanctions it placed against Iran that were designed to cut off its oil from the rest of the world. This however caused crude prices to jump by as much as 2% on the prospects of reduced supply from OPEC. US crude oil futures were trading around $60.80 per barrel, $1.50 higher than on Friday last week. Projections from analysts, however, shows that Crude oil could still drop below $50. While OPEC’s warning over the demand outlook, on top of Saudi Arabia’s decision to reduce crude output by 500,000 barrels per day in December, suggests OPEC may strike a deal to cut output when the cartel meets in early December, finding a broader agreement may not be that simple. Therefore leading to more fall in the prices….or not…

How does this affect you as mineral owner?

The reality is that oil prices are uncertain and will always cycle through highs and lows. There are numerous factors that go into consideration when someone goes to sell their mineral rights, and we at Pheasant are available to help with that. Everyone has different things going on in his or her life and you also have to make a decision that will really benefit your family. Holding onto a property that may never be leased or drilled on during your lifetime doesn’t make sense if you have a need today. In the event you have questions, need more insights, or recommendations about your mineral rights, we at Pheasant Energy are here to help you! We follow trends, engage mineral owners every day, and provide amazing offers. Pick up the phone, we look forward to hearing from you soon!