Dear Reader,
West Texas Intermediate oil generic future is trading at 32.77 USD, while Brent oil generic future is trading at 35.36
As can be seen here on my blog, I already forecasted a significant price rise for oil.
West Texas Oil future more than doubled from 12.34 USD in three weeks.
How high can oil go? I forecast both WTI Oil and Brent Oil futures could near 60 USD, before falling off again.
This makes stocks of both oil majors like Saudi Aramco, Exxon Mobil, Chevron, BP, Royal Dutch Shell, Total, Gazprom, Lukoil, Petroleo Brasileiro and mid cap oil companies like Marathon Oil Corporation and Hess Corp attractive in the near term.
The temporarily higher oil price could also provide a short-term boost to large emerging markets with large oil production capabilities like Russia, Brazil and Saudi Arabia. The Russian ruble and the Brazilian real could shoot temporarily higher on the back of the rising oil prices.
I do not think, however, the oil price rise will be long-term. The coronavirus shock to the economy is so great that consumption will be permanently depressed in the next 2-3 years. There is simply no fundamental backdrop on the horizon, which can support oil prices above 60-65 USD in the next three years. Unless, of course, oil supply falls really a lot.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
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.)!
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.)!
Respectfully yours,
Petar Posledovich
No comments:
Post a Comment