Is It Game Over for Oil Bears?

Stick a fork in oil bears, they’re cooked. 

Look, my longtime readers in our investment community know that we’ll never say, “I told you so.”

Well, almost never.

For us, we’ve watched the bullish catalysts line up for months. Delusion had set in the mainstream media regarding demand — they were grossly underestimating it in the hopes of keeping a lid on crude prices. 

If you recall, both the IEA and EIA have been forced to continually revise their numbers to the upside. 

In fact, we saw it happen again last week!

Game Over for Oil Bears

In its latest Short-Term Energy Outlook, the EIA came out and said it all (emphasis my own):

“This month we revised the 2022 global liquid fuels consumption data available in our International Energy Statistics, increasing our assessment of global oil consumption that year by nearly 0.8 million barrels per day compared to last month’s STEO. The historic data serves as a baseline for our short-term forecasts, affecting our view of energy markets this year and next. This month’s revision to historic data, as well as current market dynamics, led us to increase our forecasts for global oil consumption in 2024 and 2025 between 0.4 million b/d and 0.5 million b/d in both years.” 

This means that the EIA now expects global liquid fuels demand to average 102.9 million barrels per day in 2024 and 103.8 million barrels per day in 2025. 

Naturally, this led the EIA to also boost their Brent crude price forecast this year to $89 per barrel this year. 

Given such a poor track record on these forecasts, it’s almost inevitable at this point that we’re going to see these numbers increase going forward. 

I believe they’re getting it wrong again, and I’m not the only one that thinks this… 

So buckle up, because things may quickly get out of control.

If there has been one catalyst that I’ve told you would rear its ugly head this year, it’s the tighter supply/demand balance in the market. This is especially crucial to understand considering the market has been overstating supply and understating demand for so long. 

This week, Vitol Group reported that global oil demand will grow by 1.9 million barrels per day this year — that’s half a million barrels per day higher than the International Energy Agency’s forecast. 

It’s a recipe for $100/bbl oil that cannot be ignored, and certainly enough for the market to shrug off a bearish weekly oil report out of the EIA yesterday. 

A couple of days ago, I told you about the last oil trade I’m making before the summer starts heating up and that oil prices will start threatening $100/bbl again. As I mentioned then, the summer driving season hasn’t struck just yet, and oil has felt a little overbought recently. 

However, it appears that any potential sell-off may not happen. 

If you haven’t realized it yet, this is a serious problem considering that supply growth outside of OPEC+ is constrained; strong demand growth means that they can put more oil on the market to keep prices within a comfortable range. 

You know just as well as I do that this places an even greater value on those hidden domestic oil drillers that can successfully boost production going forward. 

But don’t take my word for it, this is an opportunity you have to check out for yourself.

Until next time,

Keith Kohl

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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.

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