As most of you know, while I do invest in stocks in the energy space, and occasionally give you my opinion of individual security based on the research I do for that investing, my day-to-day interest is more in oil, and specifically in crude oil futures. I follow the various influences on that closely and, like most traders, nearly always have an opinion on the longer-term trajectory of the market even if my trades are typically intraday. Recently, though, I have not had one and have just been trading off of technical signals and keeping everything very short term.
That is changing right now.
My lack of a long-term base case for crude has been because there are conflicting influences on price, some bullish and some bearish. That is nothing new. There always are both bullish and bearish influences, and sometimes they are of roughly equal weight, as they have been for a while now. There is, however, always a point which my research and forty years of experience tell me that the balance is shifting, and we are at that point now and oil looks set to climb as a result.
Mainly, that is because the biggest bearish influence on crude is becoming less and less certain. Even as OPEC has cut output and maintained their lower production levels and the disruption of the Russian war in Ukraine has been added to by a flare up in the Middle East, oil prices have been held back by traders’ pessimistic outlooks for global growth. A couple of years of rapid rate hikes…