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Oil Update—April 2024

My expectation for West Texas Intermediate (WTI) oil prices for May is unchanged from April. That is, WTI should range from $75 to $95 per barrel. A narrower range is from $77.50 to $87.50 per barrel.

When I provided my update last month, many seemed optimistic that current prices just above $80 per barrel were a way station on the path to imminent higher prices. I was more cautious, believing that there are geopolitical and economic forces at play that may damp a rapid escalation of prices. China may enter the picture to restrain oil prices. And, of course, there are wars in Ukraine and Israel, and central banks are still fighting inflation.

Nothing has materially changed from last month to change my outlook. I keep hoping for a breakthrough in the war in Israel, not because of its effect upon oil prices but because it would be good for humanity.

Usually, I have an article to reference to bolster my position, but not today. My quick take is that oil markets are still settling out from the OPEC+ cuts.

Eric Nuttall, whom I greatly respect, has a more bullish outlook than I do. Even when you disagree or have a slightly different viewpoint than others, you should always consider their opinions. So I will leave you with his eight-minute YouTube.

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