Looking ahead to 2020 crude oil prices

The recent OPEC cuts seem to be rallying optimism in the price of crude oil in 2020.

The last quarter of 2019 has definitely been a roller coaster with fears over the trade wars with China, uncertainty in OPECs pending decision over member quotas, Canadian companies hotfooting it to Texas to escape the Canadian govt’s lack of support to the industry, throw in an IPO, a few mergers and bankrupcies and a disheartened investment sector waiting for the much hyped recession to hit….but it would seem that despite all the doom and gloom about slow downs and booms to bust, the oil and gas industry is holding it’s own.

Restructuring and new advancements in technology aimed at meeting climate goals, keeping investors happy, making the industry safer and cleaner and more streamlined still won’t keep everyone happy. If you merge, you have to be in trouble.. if you diversify.. oh you must be in trouble.. if you tighten your belt and re-align your business model… oh you are definitely in trouble.

It’s hard to read any industry news lately that wasn’t full of negative opinions on how the oil and gas industry is a mess.
Is it perfect, no.. are their improvements to be had.. of course, no industry can expect to be successful if it stagnates. Has the industry peaked? highly doubtful.

Now is the time for the industry, investors and well intentioned opponents to fossil fuels to join forces and find a way to coexist. Oil and gas is not going to disappear anytime soon, the world is too reliant on the products and bi-products and I would put money on some of the most vocal opponents to fossil fuels being as heavily tethered to them as any one else living in a modern world.
NMOGA shared a recent report from the Global Energy Institute on the impact that a fracking ban would have on New Mexico.

Related: new-mexico’s-permian-basin-threatened-by-hydraulic-fracturing-ban/

The OPEC+ Deal Was The First Step To $100 Oil

By Dan Steffens – Dec 10, 2019,

Refinery

The price of oil has been trapped in the mid-$50s because of fear:

1) Fear that OPEC+ would break ranks and flood the global market with oil.

2) Fear of weaker oil demand thanks to a global recession, which now looks extremely unlikely.

3) The belief that the United States can ramp up oil production at will to meet global demand

Fear #1 was eliminated on December 6thNow that the OPEC Cartel members and Russia have agreed to lower their output by another 500,000 barrels of oil per day through March, oil traders can check that box and we can focus on debunking the “Fear of Recession”.

FEAR and GREED drive the markets. FEAR draws more viewers to the over-rated cable news networks, so we are bombarded by terrible predictions of gloom & doom. The oceans aren’t rising, the polar bears are still producing little polar bears, the planet isn’t burning up, and demand for oil is not slowing down anytime soon.

In my opinion, the “Right Price” for West Texas Intermediate (WTI) is $65 to $75 per barrel. However, all oil price cycles overshoot the market and this one is on-track to cause an oil shortage within nine months.

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