Hedgeye Senior Energy Analyst Joe McMonigle discusses key bullish and bearish catalysts for oil prices on Bloomberg TV.
According to McMonigle:
- "We're still in the very upper range in crude inventory numbers. It's likely to stay at very high levels throughout the entire length of this current OPEC production cut deal."
- "US shale has proven to a lot of skeptics that it can change with whatever the market dynamics are. I don't think we're going to see any kind of collapse in US shale at current price levels."
- "OPEC will obviously continue to be a subject for oil markets with respect to what they may or may not do...the market has been generally disappointed with the [OPEC] production cut deal...one interesting data point is where WTI is today versus where it was a year ago--it's only about $0.40 more. This is after 7-8 months of the oil production cut deal. The market is not very impressed."
- "Geopolitics to date has had really no impact on the oil market because of high crude stocks. But I think we're now entering a phase where geopolitics is going to have an impact. The top of that list is Venezuela."
- "The other geopolitcal event we're watching is the Iran nuclear deal. It comes up for recertification in October. I think it is in serious trouble. If US sanctions were to be reimposed on Iran, that's about a million barrels a day that Iran has added to oil markets since sanctions were lifted. All of that oil, or most of it, would be in jeopardy."
- "There are a lot of bullish indicators for oil on the geopolitical side. Less so on the fundamental front where the summer driving season is coming to an end. We're going to see oil prices really struggling in the fall."