Specious Argument

Unlike my typical practice of giving my monthly oil price range forecast for West Texas Intermediate, for the coming month, I am not providing a range because the uncertainty is too great.

There are at least three major factors underlying the uncertainty. First, the magnitude of the decrease in Iranian oil exports due to new sanctions is unknown. I have read articles that suggest as little as two hundred thousand barrels per day and as much as one million five hundred thousand barrels per day. Second, Venezuela’s future oil production volumes remain uncertain. On May 23, the online Wall Street Journal article “Keep Your Eye on Venezuela’s Oil—Energy Journal” (subscription might be required) stated as follows:

Due to political and social unrest, Venezuela’s oil output slid around 23% over the course of last year, according to International Energy Agency figures.

And the collapse is picking up steam. Venezuelan crude output has dropped by an additional 200,000 barrels a day this year to stand at 1.42 million barrels a day, a 15-year low and a striking reversal of fortune for a country with the world’s largest oil reserves.

And third, OPEC and Russia have indicated that they plan to agree to increase production at their June 22 meeting. The volume and duration of their increase is unknown.

Because there are too many significant unknowns to make a reasonable estimate, I am taking a wait-and-see approach.

After celebrating his eighteenth birthday in March, Cazador passed away on April 11, 2018.

In the photograph, taken a day before he passed away, you can see the intravenous line that went into his back for his subcutaneous fluids. He had kidney disease, high blood pressure, arthritis, and possibly pancreatitis and cancer. And because he had been receiving fluids for so long, we were concerned about his heart toward the latter part of his life.

About four years ago, Cazador’s appetite was weak and he was vomiting frequently. Along with his usual physical examination and blood work, Cazador had undergone an ultrasound test. Although the results were not conclusive or specific, his veterinarian at that time, now retired, believed that steroids, subcutaneous fluids, and other medications might alleviate his symptoms without necessarily treating the root cause of his gastrointestinal problems. She also mentioned that the root cause might be cancer, but without exploratory surgery, we would never know.

Cazador’s picture taken during his morning fluids treatment. This picture was taken the morning before he passed away.

Long-term use of steroids might cause other problems, and long-term subcutaneous fluids stresses a cat’s heart. Wanting to avoid surgery, I chose to proceed with fluids, steroids, and other medications. The surgery option was not appealing because, at fourteen years of age, he was already considered an older cat and because surgery might reveal a problem that had no solution. I wanted the remainder of his life to be as comfortable as possible.

When the veterinarian gave Cazador his first fluids at the clinic, he put up a mighty struggle because he was unfamiliar with the setting and he was separated from me. His struggle and my squeamishness about medical procedures led the veterinarian to say that Cazador might not be a good candidate for subcutaneous fluids. Reading between the lines, I also took that to mean that she thought I might not be able to muster up the courage to give him fluids on a regular basis, especially considering how difficult he was in the clinic. Initially, my mother came over every other day to give him his fluids while I kept Cazador calm. And although I am very squeamish when it comes to anything medical, I eventually took over and quickly learned and modified her method. Much to my surprise, Cazador liked receiving fluids from me. When he saw me entering his bedroom and hanging the bag of fluids on the intravenous pole, he, too, entered his bedroom and climbed up onto his pillow “nest” on his bed using the steps that I provided. He then stretched out and waited for me to get everything arranged. When I pinched his skin in preparation for the needle, he stretched out even further and often began to purr. It was a well-choreographed dance. On occasions when my mother was present during his fluids treatment, she always marveled at Cazador’s tranquility.

As mentioned, his subcutaneous fluids began as an every-other-day procedure. Then it progressed to a daily routine, and during about the last three months, I gave him fluids twice a day.

In recent months Cazador had lost a lot of weight. When examining Cazador at his last visit, his veterinarian felt a blockage in his upper chest at the transverse colon area that she thought might be preventing him from eating. Without invasive surgery and a hospital stay, there was simply nothing more that could be done. Because of his age, frailty, and other ongoing conditions and because he and I were so attached, I, with the support of his veterinarian, made the humane decision to allow him to slip away gracefully and peacefully to the great beyond.

I am slowly adjusting to not having Cazador around. During the latter part of his life, he needed a lot of care. Every four to six hours he required some form of medical treatment, such as needles for pain medication, various pills, and fluid injections. We had developed an elaborate routine where we each knew what to expect and when. Now, of course, our routine has ended abruptly.

Throughout his life, he was very happy and easy-going. He always enjoyed playing games. One of his favorite tricks, for example, was to wake me at three o’clock in the morning for a brushing. He had me well trained. And right up to the end of his life, his mind and his sense of humor were as sharp as ever. I miss him terribly.

Switching topics, if any of you need to give your cat subcutaneous fluid at some point, I have a couple of recommendations. First, place the fluid bag in a sink filled with warm to hot water before giving your cat its fluids. That will allow the fluid to be warm when it enters your cat. Your cat will appreciate your thoughtfulness. And second, provide your cat with a warm bed to receive the fluids.

I recommend this heated blanket (Amazon affiliate link). It comes in different sizes. I had three of them for Cazador. I have one on my bed, one where he got his fluids, and another in my office. I put blankets or cat beds over top of the heating pads and allowed him to come and go as he pleased. He absolutely loved his heated spots. For other options, you can go this page on Amazon (affiliate link).

My expectation over the next few weeks for West Texas Intermediate oil prices is that they will be bound between $60 and $70. As compared to my last month’s forecast, I increased the upper end from $67.50 to $70. My reasons for the increase are changes in the Trump administration, namely the announcements of Mike Pompeo and John Bolton for the positions of secretary of state and national security advisor, and the approaching driving season. The changes in the administration suggest a more hawkish stance on foreign affairs. And the driving season increases gasoline demand. Otherwise, there has not much been much change since last month.

Last month, I stated that I expected that West Texas Intermediate oil prices would be bound between $60 to $67.50 for the next few weeks. With a brief exception, WTI prices have been stayed within that range. I am reiterating that same expectation for the next few weeks because nothing has changed.

The ongoing geopolitical uncertainties remain. And the ongoing debate whether the increase in shale oil production will cause oil prices to recede again has yet to be resolved. Many believe that increasing demand is too great for shale to overcome, while others believe that current high prices will encourage too much production.

Today’s Wall Street Journal article “Forecasts for Oil Prices Rise for Fifth-Straight Month” states that investment banks have raised their price forecasts yet again (subscription might be required).

LONDON—Banks raised their forecasts for oil prices for the fifth month in a row in February, signaling continued confidence that prices will continue to recover as the global supply glut drains due to production cuts.

Brent crude—the global benchmark—is now expected to average $62 a barrel this year, while West Texas Intermediate, the U.S. standard, should average $58 a barrel, according to a poll of 15 investment banks surveyed by The Wall Street Journal toward the end of February. Both predictions are up roughly $1 from the January survey.

Even investment banks are having a difficult time trying to forecast oil prices.

On an investment site, one person commented that my forecasts were effectively useless because they stated the obvious. It was almost as though I was saying that there will be snow in Calgary in March, and it will be warm in Florida. There’s a certain amount of truth to this commenter’s complaint. The range is reasonably wide, and the forecasts do tend to mirror the latest prices.

The challenge, though, is that if I were to make the range narrower, then I would be much more likely to be wrong, in large part because I have no hard data for increased specificity. If I were to attempt to provide a forecast for a period further into the future, I would be truly guessing. Even those with access to far better information and statistics are not able to provide accurate longer-range forecasts. So instead, I focus on the next few weeks. I attempt to provide my reasoning based on information gained from the articles that I have read.

In summary, I expect that WTI oil prices will be bound between $60 to $67.50 for the next few weeks.