Oil Price - May 19

dan_s · Post by **dan_s** » Thu May 19, 2016 11:32 am

Read this: http://www.investing.com/analysis/senti ... -200130547

Many years ago, I published a report on the relationship between oil and gold prices. Bottomline, gold and oil prices normally trade in lockstep with gold trading at 15X to 20X the price of oil. The relationship never stays out of whack for long. Today gold is trading for more than 26X the price of oil. At 20X, oil should be selling for $62.50/bbl. I think it will get there in Q3.

WTI opened more than $1 lower this morning, but it is now off the low. Rising dollar is a headwind, but supply/demand fundamentals will win out in the end. Demand for oil should exceed supply within 3 to 4 months.