What happened

Monday dawned bleak for oil stock investors as a sell-off that began early last week gained steam. As of 11:20 a.m. ET, the cost of a barrel of WTI crude oil had fallen to $75.50 -- down 5.7% from Friday's close and the lowest price seen so far this year. The situation with Brent crude oil, the international benchmark, is both better and worse. 

It's better because at $82.50 a barrel, Brent oil isn't quite as cheap as it was way back in January 2022, for example. Back then, Brent prices briefly fell below $80 a barrel, and Brent crude could be had for almost today's prices as recently as September. But worse -- Brent oil is currently 5.8% below Friday's close, a slightly more negative move than WTI crude prices are experiencing.

Oil stocks are suffering in consequence, with Occidental Petroleum (OXY -0.97%) falling 5.7% this morning, smaller oil producer Devon Energy (DVN -1.39%) down 6.4%, and independent oil producer Diamondback Energy (FANG -0.48%) down 8.8%.

So what

Reporting on the slide in oil prices, Reuters today cited the same factors that worried oil investors last week: A strong U.S. dollar means fewer dollars are needed to buy each oil barrel, worries that China's zero-COVID policy will continue to depress oil demand in that country, and general concerns that recessions in the United States, the European Union, and the United Kingdom will sap demand for energy in these regions, as well.  

There's actually pretty good news for many consumers, though: Some long-term forecasts expect that Europe will enjoy a mild winter this year and into 2023. On the one hand, that's great news for homeowners and businesses that have been wondering how they'll get through winter due to oil and gas embargoes on Russia. On the other hand, it removes a key support for oil prices in Europe, which is probably helping to push oil prices lower.  

Now what

So there's good news and bad news for energy investors. But here's the straw that may be breaking Big Oil's back today.

As The Wall Street Journal reports, the OPEC+ oil cartel is responding to President Biden's pleas for more oil production by considering a 500,000 barrels-per-day increase in its oil production quota. Such an increase wouldn't entirely reverse the effects of the cartel's earlier decision to cut production by 2 million barrels per day, which was announced early last month. But it would mitigate the inflationary effect of that October announcement. 

Of particular importance to energy investors, Saudi Arabia and the other oil producing nations won't actually make their decisions on any potential production increase until a meeting that's scheduled for Dec. 4. This means that for the next two weeks, investors are kind of stuck in limbo. Will OPEC or won't OPEC raise prices? Investors don't know.

In the short term, this probably means investors can expect more price volatility -- both in oil and in oil stocks -- at least through early December. That can be unsettling, but the good news is that for longer-term investors, there may be good opportunities to scoop up cheap oil stocks. With Devon Energy shares fetching just 7.3 times earnings right now, Diamondback costing only 6.3 times earnings, and Occidental trading at an enticing 5.9 times earnings, this is an opportunity that shouldn't be overlooked.