Episode 63 - RBC's Oil Price Predictions | Trump and Iran | Dr. Dean Foreman - a podcast by Ryan Ray & Ellen Wald

RBC now thinks oil will go to $80 this summer
https://www.cnbc.com/2019/04/11/prepare-for-80-oil-this-summer-as-wounded-bulls-rise-rbc-warns.html
Will oil hit $80 this summer?
“Asymmetrically skewed to the upside spurred by geopolitically infused rallies.”
Back in January 2019 RBC forecast $60 for WTI and $68 for Brent average prices. Now the forecast is $67 for WTI and $75 for Brent.

How Trump should handle the Iran sanctions
https://www.bloomberg.com/opinion/articles/2019-04-10/trump-and-iran-ramping-up-sanctions-without-an-oil-price-spike
Trump shouldn’t zero out Iran’s oil exports because there’s no political or diplomatic benefit and it could push gasoline prices up right as people get on the road this summer.

API’s Monthly Statistical Report - March 2019 -- https://www.api.org/~/media/Files/News/2019/19-March/Monthly_Statistical_Report_February_2019.pdf

Interview with API Chief Economist Dean Foreman

Petroleum Demand - solid demand but growth slowed a little bit (0.4%) - a little lower than expected. Several factors - we’ve enjoyed above trend growth for awhile, especially this past February.
API DEFI (economic indicator) - conflicting signals right now. Demand is very high, drop in exports.
Oil inventories - higher yr/yr (6.4% higher) is consequential. Above 5year average. This time last year we were concerned inventories were going lower. But oil prices are rising right now - buoyed by OPEC production cuts.
Based on production right now its not unusual to see upward price revisions from banks right now. But - what’s happening with US dollar and what’s happening with interest rates? But Fed. Reserve has signaled that its not going to raise interest rates for the rest of this year, and possibly not until 2021. This should take some of the air out of the dollar. Expectation that oil market will respond in tandem.
Can the U.S. increase its crude oil exports as Saudi Arabia looks to keep more crude at home for refining? Depends on whether Saudi Arabia can really build so many refineries especially with everyone else expanding its refining capacity - India, US, Mexico, etc.
Impact of grounding of Boeing Max 8 - having at least a minor impact.
What should we watch for in summer months? China trade deal could have a major impact on crude oil, natural gas markets, LNG markets, global shipping rates.
IMO 2020 - When will this impact prices? Different forecasts- could be 20% price impact but investments have been made in preparation for it. Also depends how strictly it is implemented and that we will have to see. Compliance will increase over time. Market is probably pretty resilient.

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