I have made some terrific calls over the years, but making
calls in markets is not my strong suit. So any call I make
requires a disclaimer as to veracity.
That said, oil looks like it's put in a top up at $70 and
change per barrel. There's support at $60 and again in the
mid-50s, but I think it will drop to $45-50 per barrel before
year's end.
Globally, conservation efforts should be taking hold. Household
budgets will also be trimmed some as well. OPEC may well push up
production in the weeks ahead. The US will gradually add back 1
million bd. It is not hard to see surplus at the wellhead move
up to 3 million bd. for a while before the end of this year.
That should be enough to assuage the shortage mentality that has
gripped a market yet to experience any shortages.
To me, natural gas over $10 per mcf is also hyper-extended, and it
would not surprise me to see gas down under $10 before long either.
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