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Page added on July 1, 2018
Here’s why oil’s surge is far from over, and $100 per barrel could be in the cards
With oil rallying 14 percent in the second quarter alone, investors might be tempted to take some profits.
That would be a mistake, says one widely followed energy strategist.
“What we’re looking for now in WTI is we’re looking to go to $77,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC on Thursday’s “Futures Now.” “If we break above that, then there’s considerable room to run.”
In other words, Croft believes that oil would still need to rally over 3 percent — but the commodity could keep hitting multi-year highs should that level be reached. The strategist had previously stated at the end of May that a return to $100 oil was possible in the future.
The current geopolitical climate could provide the beginnings of that rally. Earlier this past week, the U.S. pressed its allies to block Iranian oil imports, a move Croft described as an attempt to “take Iran down to zero.”
Since then, oil has spiked to its highest levels since November 2014, and ended June with its fourth straight quarterly gain for the first time since 2010.
Croft believes that tensions in the Middle East could also exacerbate the supply of oil in the market, thereby driving up demand and hiking oil prices higher.
“I think this market is going to tighten in the back half of this year, I think there’s no way around this,” she added.
Croft also stressed that all eyes were also on Saudi Arabia to see how many barrels they could produce. On Tuesday, reports that the Saudis were planning on hitting a record oil output of 11 million barrels a day temporarily sent oil prices lower.
19 Comments on "Here’s why oil’s surge is far from over, and $100 per barrel could be in the cards"
dave thompson on Sun, 1st Jul 2018 11:14 pm
LOL $100 OIL = ECONOMIC CRASH. TPTB know it too.
MASTERMIND on Sun, 1st Jul 2018 11:51 pm
Dave
Yup, and with trump canceling the Iran deal our fate is pretty much sealed..
Makati1 on Mon, 2nd Jul 2018 12:25 am
“$100 per barrel could be in the cards”
Bring it on! Do I hear $200? LOL
dave thompson on Mon, 2nd Jul 2018 3:32 am
Yea $200 great move for the ones in charge to bring about a false economic crisis.
Bob Jones on Mon, 2nd Jul 2018 4:07 am
The next 7 years are going to be tough for the United States.
Baby Boomers have been destroying the country for decades, leaving nothing for the younger generations but debt, enemies, and a failing infrastructure.
Davy on Mon, 2nd Jul 2018 6:21 am
There is plenty of negative economic news especially in Asia and Europe to question much of an increase. Too early to tell would be my guess until these issues play out.
twocats on Mon, 2nd Jul 2018 6:45 am
you would have to believe in some mega-ass conspiracy theory to believe that Donald Trump is the “master plan” by TPTB or the “one’s in charge”. impossible to believe that this ship is being guided by anyone other than Pompeo, Bolton, Trump, Sessions on a day by day basis. there is no plan beyond lunch.
BobInget on Mon, 2nd Jul 2018 8:37 am
Oil, the real message
KSA apparently reopening problematic offshore Marjan field (acidic), capacity 500k BOD, and giving notice Khafji (half owned by Kuwait) will reopen in 2019 (also problematic), about 500k BOD capacity. Clearly, if the liars at KSA had any real spare capacity at Ghawar, they would simply ramp up this higher profit oil to compensate for PDVSA/Iran. KSA has now inadvertently confessed to the world they have no spare capacity, unless high cost, difficult to produce fields, are brought on. To put this in perspective, the world now uses about 36 billion barrels of oil every year, while Ghawar has no more than 30 billion barrels still recoverable. Iranian oil will continue to find it’s way to market, but, at large discounts, hurting Iran’s ability to maintain production. Mr. Trump can jawbone all he wants, but reality?
JuanP on Mon, 2nd Jul 2018 9:53 am
“Russian budget gets $65 billion boost from OPEC+ oil production cuts deal”
https://www.rt.com/business/431466-russia-budget-oil-deal-opec/
Outcast_Searcher on Mon, 2nd Jul 2018 12:34 pm
Good old Dave, the ETP adherent. Learning from history just isn’t there for you, huh?
“LOL $100 OIL = ECONOMIC CRASH. TPTB know it too.”
Absolute nonsense.
$100ish inflation adjusted global oil prices from roughly mid 2010 to mid 2014 was pretty much a non-event.
The laughable ETP idea that oil was “unaffordable” at $40ish was a complete joke too. Much less the idea that in 3 years it will be at $2ish due to “unaffordability” issues.
More likely around $150 in a few years. Meh for the first world GREAT for efficient cars of all types. Very hard on 3rd world growth, but will help spur China to accelerate EV and battery production.
So pretty much as much “CRASH” as the bad calls for the last 50 years from the Cassandras. Got it.
Outcast_Searcher on Mon, 2nd Jul 2018 12:37 pm
So which is it Dave. $100 causes a “CRASH” or $200 causes an “economic crisis”?
Doomers can’t even be remotely consistent for 5 minutes?
Outcast_Searcher on Mon, 2nd Jul 2018 12:40 pm
Of course Bob Jones. Anyone younger than 40 should have NO personal responsibility.
Anything that happens to them is someone else’s fault. They can power the economy and their own prosperity by whining power.
Who needs to save or get a real education when they have THAT to rely on?
MASTERMIND on Mon, 2nd Jul 2018 1:25 pm
Outcast_Searcher
During the mid/late 20th century (1960-1999), a barrel of oil cost $19 on average; during the years immediately prior to the Great Recession (2000-2008), the average price of a barrel of oil had increased to $47; and during the years immediately following the Great Recession (2010-2012), the average price of a barrel of oil had further increased to $81. During the same three time periods, the average price of a metric ton of copper increased from $3,085, to $3,713, to $6,817; the average price of a metric ton of iron ore increased from $36, to $57, to $124; and the average price of a metric ton of potash increased from $114, to $185, to $343. (Prices are inflation adjusted.)
The simple fact is that we cannot grow our global economy and improve our global material living standards on $55 oil, $6,817 copper, $124 iron ore, and $343 potash like we did on $19 oil, $3,085 copper, $36 iron ore, and $114 potash. It should come as no surprise that our Non Renewable Resource-dependent global economy experienced the Great Recession during 2009. Nor should it come as a surprise that we have yet to recover from the Great Recession. Nor will our industrialized and industrializing economies ever recover, so long as price levels associated with the vast majority of Non Renewable Resources remain at their inordinately high levels.
Source: Hamilton (2009)
https://www.brookings.edu/bpea-articles/causes-and-consequences-of-the-oil-shock-of-2007-08/
Source: IEA
http://www.iea.org/textbase/npsum/high_oil04sum.pdf
Source: IMF
https://www.imf.org/external/pubs/ft/oil/2000/
dave thompson on Mon, 2nd Jul 2018 1:29 pm
OUTCAST.An economic crash would be short term. An economic crisis would indicate long term.
twocats on Mon, 2nd Jul 2018 1:52 pm
dave – its questionable if you could have any sort of economic crash without having a crises of the type you are referring to. this isn’t 2009 when global debt was a “got that in my pocket” 144 trillion. Now its – well gosh – not sure how high it is now. anyone? bueller?
Bob Jones on Mon, 2nd Jul 2018 1:58 pm
Outcast_Searcher I think Baby Boomers invented the “personal responsibiity”-meme because they never took any… (see Clinton, Bush, Trump).
Baby Boomers have an OUTRAGEOUS sense of entitlement that is hard for younger people to understand.
The United States didn’t just get this way. A quarter century of Baby Boomer childishness, selfishness, and irresponsibility made it this way.
Now, the younger generations MUST pay the price.
MASTERMIND on Mon, 2nd Jul 2018 2:19 pm
Bob
Baby Boomers are just brainwashed. Old people seem to have completely bought into propaganda. They just repeat things from cable news verbatim without thinking..Boomers also have a profound sense of entitlement because, in their minds, their parents “saved” the world from the evil Nazis and thus deserve to inherit the Earth…
dave thompson on Mon, 2nd Jul 2018 2:50 pm
As a baby boomer myself I do not have or feel that I have a sense of entitlement. Many of my peers are still working into their sixties and seventies trying to stay afloat. I myself am living a life of affordable laziness, through poverty. I get a meager SS payment and I have a small savings that allow me to do what I want without working as long as I stay in poverty and my means. My entitlement? None that I can think of unless you count taking SS, by the way, I paid into my whole adult working life. And I still do pay into, with the small amount of income I make.
tahoe1780 on Mon, 2nd Jul 2018 5:11 pm
Interesting site: Who rules America?
https://whorulesamerica.ucsc.edu/