Oil Price - Aug 2

[dan_s]

The "Roller Coaster Ride" gets off to a wild start in August.

WTI Price
$58.53 at noon on 7/31
$54.28 at noon on 8/1
$55.83 at 7AM ET on 8/2

Just keep in mind that all of my forecast models assume that WTI will average $55/bbl in Q3 and it was well above that during July. My guess is that we end the quarter much higher because big draws from U.S. oil inventories should continue through September.

For now the price of oil is "Headline Driven" by Tariff Wars, Iran, Venezuela, Hurricanes, Libya, etc. The fact is that global demand exceeds supply by about a million barrels per day and OECD inventories are heading to an all-time low on days of supply AND U.S. oil production has flatlined because we aren't drilling enough new oil wells to offset the rising decline rate. Eventually, supply & demand set the price.