$200 oil? “Not sure I have ever seen a divergence in commodity markets to this degree, where the physical is undergoing extreme and growing tightness while related financial instruments are undergoing wholesale unrelated liquidation related to tightening financial conditions.”
Once liquidation/deleveraging/degrossing have run their course, price discovery in oil is going to be truly epic. In 2016 the oil price recovered 70% in four months ($50 by June), and more than doubled by early 2018 — and the market back then was still oversupplied.
Today you have several years of underinvestment among other long-term trends colliding to create a global shortage. In the context above, doesn’t $200 seem conservative?
Once liquidation/deleveraging/degrossing have run their course, price discovery in oil is going to be truly epic. In 2016 the oil price recovered 70% in four months ($50 by June), and more than doubled by early 2018 — and the market back then was still oversupplied.
Today you have several years of underinvestment among other long-term trends colliding to create a global shortage. In the context above, doesn’t $200 seem conservative?