Soaring Oil Prices Go 5 Percent, $90

Soaring Oil Prices Go 5 Percent, $90

Figure 1. As soon as I renewed $75 the price of oil skyrocketed as much as 5%, and it was a satisfactory move because it reflected the trend of fundamentals that had not been reflected so far.

Figure 2. The key to oil prices is crude oil inventories. According to EIA data released this Wednesday, 24-year crude oil inventories (in red) are breaking all time lOW except for 22 years, which is why there is a shortage of crude oil.

If crude oil inventories fall, oil prices rise, showing that this trend could continue into September if you refer to the seasonal movements of other years.

Figure 3. Crude oil inventories come from the difference between supply and demand. If you look at demand in 2024, it is only lower than in 2021, so demand is sound.

Figure 4. So what’s left is supply, and Saudi Arabia reportedly cut production to COVID levels in June, and cut production to similar levels in July.

I have more data, but it’s four, so just to put it in writing, Saudi Arabia is not the only country that is going to cut production. Even the most OPEC countries, including Russia, which was a good liar, are participating in production cuts.

Opec prefers Trump to the green-pushing Biden administration, so everyone’s trying to cut production to lower oil inventories and raise oil prices. I don’t know exactly what their intentions are, of course,

At the very least, crude oil inventories are going down steeply now towards ALL TIME LOW and oil prices could go as high as $90 to $95 if that trend holds in August and September, especially on the supply side.

Naturally, oil companies will benefit greatly from this trend. We have analyzed in detail which oil companies will benefit greatly from the good fundamentals!

[Fundamentals of crude oil]