HFI Research is a respected firm. They agree with me that the "Right Price" for WTI oil is within the $80 to $85 range. Oil prices are getting a bit of a geopolitical risk premium from the war going on in the Middle East.
> EIA has been overstating U.S. oil production.
> IEA continues to understate global oil demand.
> Saudi Arabia is the only OPEC+ country that is significantly holding back production.
> U.S. oil production is likely to peak in 2025. < When this sinks in, oil prices will go a lot higher.
"Our short-term view on the oil market is that oil prices are at the top end of the trading range ($80-$85). However, as fundamentals move along and inventory draws resume (after April), we see oil prices moving to a structurally higher price range ($85 to $95). This will be fueled by the two variant perceptions we discuss below."
If you want to see the full HFI article, send me an email and I will forward it to you: dmsteffens@comcast.net
Oil Price Rally: HFI's oil price forecast - Apr 13
Oil Price Rally: HFI's oil price forecast - Apr 13
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Rally: HFI's oil price forecast - Apr 13
Wonder what happens to oil prices when the IDF takes out Iranian oil production..
Re: Oil Price Rally: HFI's oil price forecast - Apr 13
If that happens, the price of oil goes over $100/bbl the next day. Triple digit oil prices will not be good for the overall economy and eliminate any chance that the Fed will cut interest rates in 2024 or 2025.
Other than the gassers, all of our upstream companies will generate a lot more free cash flow than they planned for in 2024 if WTI just stays over $80/bbl.
Other than the gassers, all of our upstream companies will generate a lot more free cash flow than they planned for in 2024 if WTI just stays over $80/bbl.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Rally: HFI's oil price forecast - Apr 13
Something else to consider:
There are always going to be barriers to success in an industry. Barriers to entry, barriers to growth, barriers to profitability, and barriers to progress can lurk to name a few. The upstream industry has its share. For gas, its own oversupply and low prices are an issue. For oil, capital constraints are reining in investment. Both commodities also thirst for quality labor to fuel growth and longer-term underlying optimism, but that workforce does not exist right now and may take a while to develop.
There are always going to be barriers to success in an industry. Barriers to entry, barriers to growth, barriers to profitability, and barriers to progress can lurk to name a few. The upstream industry has its share. For gas, its own oversupply and low prices are an issue. For oil, capital constraints are reining in investment. Both commodities also thirst for quality labor to fuel growth and longer-term underlying optimism, but that workforce does not exist right now and may take a while to develop.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Rally: HFI's oil price forecast - Apr 13
This may be a short version of the HFI report.
https://www.hfir.com/p/public-wctw-two-variant-perceptions
https://www.hfir.com/p/public-wctw-two-variant-perceptions