Are those falling oil prices you’ve seen in recent weeks here to stay? Don’t get too comfortable…

Brent crude oil prices fell 11% recently but started climbing this week. Like usual, supply issues are at the center of the rise.

• On Monday, the United Arab Emirates and Saudi Arabia told Biden they’re already pumping at their limits.
• Yesterday, China reduced its quarantine time for overseas travelers to 10 days — down from 21 days previously.

Expect higher demand from the world’s largest oil importing country and insufficient supply to cover that increased demand. What you get are rising oil prices.

Bought the oil dip: Warren Buffett is a major fan of oil and gas giant Occidental Petroleum (NYSE:OXY) — the best performer in the S&P 500 for the year.

• He fell in love after reading their earnings conference call early this year — saying what its CEO planned “made nothing but sense.”
• Those plans were reducing debt, buying back shares and paying dividends.

So he bought moreOXY

shares for Berkshire Hathaway in the past week bringing his ownership to ~16%. They also own Chevron (NYSE:CVX).

Not everyone is as bullish. Citi released a report (SA) calling for $75 Brent oil prices in 2023 and $50 in 2024.

It’s hard to see oil prices falling to such levels when oil inventories remain tight and demand remains high. Demand destruction is one of the few things that will lower oil prices — which many expect during a recession.

Moving ETF: The Energy Select Sector SPDR Fund (NYSE:XLE) fell over 20% recently but rose again alongside oil prices in the past week.