All Hell Will Break Loose for Oil in 2023...

All hell will break loose for oil in 2023… but only if one event fails to take place.

Can you guess what it is?

Right now, it’s the ONLY thing stopping oil prices from being far higher than the $81.85 per barrel that WTI is trading for as I write this. 

But let's put a little more perspective on this, shall we? 

A few weeks ago, the price of WTI crude reached as high as $93.74 per barrel, which, at the time, was the highest it's been since the end of August. 

That rally was quickly shot down by a market that turned bearish, with WTI prices suddenly plummeting by 12.5% over the last two weeks. 

But mark my words: The market is wrong this time.

Breaking Loose in 2023

Something feels off in the oil markets.

In its latest Weekly Petroleum Status Report, the EIA reported a 9.5 million-barrel draw from commercial inventories, which includes a release of 4.1 million barrels from the SPR. 

Take a look for yourself:

Never mind that our strategic reserves are at a 40-year low or the fact that U.S. crude output remains at 12.1 million barrels per day (still 1 million barrels per day shy of the record that was set in March 2020). The truth is that oil prices should be climbing right now. 

Like I said, something feels… off. 

Personally, I’d like to see how the market feels when the SPR gravy train ends and we start seeing real drawdowns during a season that's typically weak for oil. 

Even with a few permabears out there, this certainly doesn’t warrant such a huge slide in oil prices. 

More importantly, if we still see strong demand levels in the U.S. heading into winter, we’ll soon find ourselves in a position begging for more oil from the strategic reserves. 

Today, there’s only one thing stopping oil from pushing back toward $100 per barrel.

At this point, you have to be wondering the same thing I am — where is this volatility coming from?

Most superstitious traders like to avoid using the R-word like the plague, but in oil’s case, the only thing that is preventing runaway prices is the looming threat of recession. 

The only threat to oil in 2023 is a weaker economy. With oil being the lifeblood of the U.S. economy, any slowdowns in demand would rightly push bearish market sentiment even more negative.

After watching the EIA post revision after revision to previous demand estimates, I wouldn't be surprised if consumption levels are actually much higher today than we've been told.

Of course, we’re not even considering the fact that China has yet to come out of its own recent COVID lockdowns. 

When that happens, more exports will be sucked up by China, and there won’t be much left in the SPR to save us from runaway oil prices a second time. 

Fortunately, there’s only one way investors can properly navigate through these tumultuous markets. Let me show you how my readers are doing it.

Until next time,

Keith Kohl

Check us out on YouTube!

A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.