Oil prices have been steadily climbing since February. And the convergence of several factors could propel its ascent into the back half of 2018.
Hedgeye has been at the forefront of #GlobalDivergences for months now (and more recently, a strengthening dollar). While a stronger dollar (and a weakening global economy) may seem like logical headwinds for oil, Hedgeye Macro analyst Christian Drake and Director of Sales Daryl Jones highlight a number of factors which could put a bid under crude.
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“If you’re talking about where oil is now, you’re up almost 30 percent on the year on a monthly average,” Drake says in the recent clip above from The Macro Show. “Oil was up zero percent in June 2017, so that’s what you’re comparing against this June. If we hold current prices, you’re going to be up 44 percent year-over-year in the oil price in June, and you’re going to see that in the headline.” |
Add to the mix geopolitical risks like a potential collapse of the Iran Deal (that could remove ~1M barrels/day) and it’s easier to see why oil could climb alongside the dollar.
Watch the 3-minute above clip for more.
