Currently West Texas Intermediate(WTI) and Brent Crude Oil trade at 60.14 USD and 67.58 USD. Global oil prices, along with the rest of the stock markets, have staged a remarkable recovery since 24 December 2018.
How high will the price of oil go? I forecast the price of WTI will reach 80-82 USD and the price of Brent will touch 90 USD by the end of 2019?
Why? Because, global growth as average as it may seem, can support WTI Oil price of 80 USD and Brent oil of 90 USD. What is more, OPEC is intent on keeping to the announced production cuts which will further support prices. Sanctions on Venezuela, Iran and likely future sanctions on Russia will keep a firm lid on oil supply in the world.
Global oil majors like Exxon Mobil, Chevron, BP, Shell, Total, Rosneft stand to benefit from the continuing rise of the price of oil. But, the biggest beneficiaries will be companies that extract oil through hydraulic fracturing in the United States like Marathon Oil Corporation and Chesapeake energy corporation. Emerging markets oil giants like Petroleo Brasileiro and Rosneft will also see their market capitalization swell significantly. Actually, the pending further rise of the price of oil will drive higher global stock markets by supporting petrol and chemical producing companies.
The stock markets of Russia, Brazil and Mexico will rise significantly driven by higher oil prices. All in all, if oil prices remain below 90 USD, which they will, barring a supply shock, the global economy will benefit significantly.
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Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
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