No one should be surprised at the outcome of the latest OPEC meeting, which was only hastily scheduled after the disastrous non-event that occurred in April. Still, no matter how many times that OPEC and non-OPEC oil ministers fail to reach any accord on production guidelines, there still exists a hope entering these short meetings and therefore a premium in oil's price that disappears after the inevitable failure occurs.
Every one of these failures and subsequent price drops have proven to be better and better opportunities to selectively buy oil stocks at a relative discount. And that is what I believe is happening again.
I've been completely convinced of the trajectory of oil's price after the bottoming of prices in February, and far less worried about a backtracking of prices that seems to plague nearly every other analyst I read. Most of them are increasingly cautious about the current rise in oil's price, now up more than 85 percent from those February lows. They point to temporary outages from Nigeria and Venezuela as well as the Canadian fires and rollover of production in Iraq and believe that the 'lofty' $50 price we've reached will be a temporary one, with a 'back and fill' movement in oil for the rest of the year. Most of these analysts even have targets for the end of 2017 not much higher than the prices we're seeing now, while in contrast I believe we'll see oil reach above triple digits by the end of next year.
And that is why I continue to…