Monday, January 9, 2017

OIL PRICE UPDATE FOR NEW YEAR 2017

Happy New Year for all the AmericanOilmen out there!

Oil is trading in a channel between $55 and $45.   We feel the bias is
to the upside.   The conditions that support higher prices are:

1) OPEC seems to have decided that enough is enough.  Everyone has been
reporting the death of this cartel.   Well, no one was saying they were dead
when oil prices collapsed for the last two years.   They directed this severe
drop in prices, and they aim to direct the coming price recovery.  OPEC has
calculated how much damage was done to oil projects in the world, and it
is their opinion that demand increase will now keep prices higher, even with
increased production.

2)  There is turmoil in the Middle East.   There is ALWAYS turmoil there, but
the sense, now, is that it is different this time.  The Middle East instability premium
could very soon return to the oil market.

3)  There is turmoil in many other parts of the globe.  This, too, is supportive of
higher oil prices.

4)  There could be economic growth as a result of the recent US election.   Oil
demand is growing by 1.3 million barrels per day and with economic growth this
number could go up.  This will result in a very quick return to balance in the oil
market.

We at AmericanOilman believe we have seen the bottom in oil prices, and
there is a likelihood that we see a modest increase from here.   The risk in the
market is to the upside, because of the four items listed above.

Over

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