Oil Price Forecast - May 4

[dan_s]

OilPrice.com: Could oil prices hit $80 per barrel?

"Recently, some investment banks (starting with Goldman Sachs) have predicted that crude oil prices could hit $80-$85 in the second half of this year, as Europe, and many other regions, emerge out of lockdowns and as intercontinental aviation starts to pick up again. Furthermore, the Biden Administration’s COVID recovery agenda and ongoing concerns of an inflation bubble may support this price outlook as the US Federal Reserve maintains its policy of near-zero interest rates. It is worth noting that crude markets are more driven by optimism than by fundamentals. There are several reasons why prices may not go much higher than their current levels."

Read More: https://oilprice.com/Energy/Oil-Prices/ ... arrel.html

MY TAKE: So far, WTI oil prices have been averaging more than what I have been using in my forecast/valuations by approximately $3/bbl YTD. My models are based on WTI averaging $65/bbl during Q3 and Q4. At the time of this post, the JUN21 NYMEX futures contract for WTI is trading for $65.40/bbl. Whenever we do escape from "Pandemic World", I "believe" the price of oil will move a lot higher because it is now clear that OECD oil inventories will be under 30 days of consumption within a few months (2 or 3). OECD inventories are the PRIMARY DRIVER of oil prices in this world because the OECD economies MUST HAVE A STEADY SUPPLY OF OIL BASED PRODUCTIONS.