Oil Price Forecast - April 4

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Note below from Keith Kohl (Energy Investor Newsletter).
 
Are You Finally Bullish On Oil Prices Today?
KEITH KOHL | APR 04, 2024

If you liked oil at $80 per barrel, then you’re going to love oil when it creeps above $90 per barrel this summer. I know most of the market wasn’t expecting oil prices to climb so high so soon.

We’re hardly into spring and oil’s momentum hasn’t slowed since the beginning of the year: A barrel of WTI crude is threatening to hit $86 per barrel as I write this now; a barrel of Brent crude is trading for $89.77.

That means that WTI prices have risen 22% since the beginning of the year:

Still, longtime readers aren’t shocked by this move, and know well that our outlook for oil hasn’t changed. It’s simple, really. For us, a two-headed bull has emerged that has buoyed oil markets during a period when prices SHOULD BE at their weakest point.

It comes down to a few unshakable catalysts which the market can no longer ignore:
> The growing delusion over future global demand projections.
> A period of intense geopolitical volatility that has increased in 2024.
> Fear over tighter supply as OPEC+ regains its dominance over global oil flows.
> And the market is finally waking up to these realities — just in time for peak summer demand.

Today’s Market is Finally Bullish On Oil Prices

My colleague, Jeff Siegel, hit the nail on the head earlier this week when he told you that the recent attacks on Russian oil refineries was going to lead to higher oil prices. Truth is, the Russo-Ukrainian war has entered an extremely volatile period as each side aggressively goes after the others’ energy infrastructure.

But we’re talking about more than J.P. Morgan making its millionth prediction that oil prices are going to $100 per barrel.

While it’s good to see Wall Street finally waking up and getting bullish on oil, these price projections are going to move higher and higher the closer we get to summer… just watch.

After all, last year we saw the outlandish oil predictions from Goldman Sachs calling for $140 oil, or Russia’s former President suggesting that oil prices would surge to $400 per barrel if a price cap was put on Russian oil.

Ignore the clickbait headlines like that, because you and I both know that we don’t need $200 oil to turn a profit. In fact, we WANT oil to trade in a stable range — right where it’s at currently. This not only ensures a healthy profit for the companies extracting our crude from underground, but it’s difficult for some investors to grasp the idea that egregiously high oil prices will cause more instability and lead to lower prices.

Remember, the cure for higher oil prices is high oil prices. When crude prices are elevated, it spurs drilling and leads to higher supply, which in turn will put downward pressure on prices.

Given the fact U.S. oil production isn’t going to experience much more growth this year from its current levels, the power dynamics have shifted to OPEC+, which has taken control of the world’s oil markets once again.

But that doesn’t mean my readers weren’t ready for it.