Oil Prices Today: Breaking $80 Crude

Oil prices today are climbing again, this time breaking above $80 per barrel. 

Truth be told, I wouldn’t be surprised in the least if oil continues running by the time you read this. 

The blood still hasn’t been mopped up from last week’s market rout. I can only hope that you saw the same buying opportunity created from the market crash that I did.

The moment oil prices threatened to fall below $70 per barrel — during a time of the year when demand is at its greatest — it really was a no-brainer. Remember, U.S. gasoline demand hit a post-pandemic high of 9.4 million barrels per day in May, and our petroleum consumption is nearly 21 million barrels per day. 

At that point, it was like shooting fish in a barrel. 

The hard part is figuring out what comes next…

As the world awaits Iran’s response to Israel’s assassination of Ismail Haniyeh, your guess is as good as mine as to when will happen. According to most reports, the best we can say is: Soon. 

That upcoming strike alone could spike crude prices; depending on its severity, we could very well see oil make a run for $90/bbl!

But geopolitical volatility is just a wild card for oil markets and NOT the fundamental driver behind prices. 

At some point over the next few years, we’re going to find out exactly who still holds the delusion that demand growth is stagnant. We know that some forecasts are continually being revised by groups like the International Energy Agency and the U.S. Energy Information Administration. 

Both have been low-balling projections and perhaps hoping nobody else notices when they go back and change them. 

But are we finally starting to see the bullish side of the fence start to crack? 

Maybe.

This week, OPEC members said it was revising its demand growth forecasts to 2.11 million barrels per day in 2024; this is compared to the 2.25 million barrels per day it previously forecasted. 

With Q1 and Q2 data in hand, the oil cartel believes global demand will reach 104.3 million barrels per day this year. 

What made OPEC change its mind and adjust its forecast? The reason for the revision is the expectation that China’s economy is slowing, putting pressure on the country’s demand for crude. 

Thing is, there wouldn’t be many concerned investors if global oil demand only grew by 2.1 million barrels per day.

Meanwhile, OPEC members have been pumping more oil out of the ground, with the 12 countries adding 185,000 barrels per day to their June production. 

Softer Chinese demand and higher output — this seems like the last thing we’d want to see out of OPEC, right? Let’s keep in mind that even though OPEC has opened the door to reigning-in some of its output cuts next year, I wouldn’t make the mistake in thinking that OPEC won’t defend $80/bbl oil. 

Spoiler alert: They will.

So here we find ourselves heading down the second half of 2024 with stagnant flat growth in the U.S., more inventory draws ahead, and a new major player on the oil stage in India. 

It’s still a no-brainer. 

And THIS is how my readers and I will stay ahead of the herd.

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.

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