I am updating my WTI oil price expectations for the next several weeks to range between $50.00–$57.50 per barrel. The bottom oil-price limit is higher because geopolitical uncertainties have likely created a floor near $50 per barrel. The geopolitical uncertainties stem from the conflict between the Kurds and Iraqis, North Korea’s nuclear ambitions, and the potential for President Trump to decertify the Iran nuclear deal. Another positive factor is the upcoming OPEC meeting at the end of November where many expect the agreement limiting crude-oil output to be extended beyond March 2018. The top oil-price limit has been raised because, with recent WTI prices being near $54 per barrel, it leaves further room to the upside. At current prices, producers are hedging their future production and will, therefore, produce additional volumes that should damp further increases in oil prices. With oil prices near $54 per barrel, I expect that WTI is near the higher end of its near-term range.
Oil Update–October 2017
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