The Bear Market in Oil Is Over
On December 16, 2014, I published an article for paid members of my GaryNorth.com site: “Saudi Arabia’s Oil Strategy.” I wrote the following about West Texas intermediate crude oil prices:
WTI oil hit $37.51 in February 2009. This was in the midst of a major recession. It was back to $80 by late December. I do not see a crash coming next year. The economy worldwide is not strong, but this is not 2008. If WTI gets to $45, it will be a buying opportunity for energy stocks. My guess is that a $75 to $80 price in a year is reasonable. The panic that we see today is not a foretaste of 2009 next year.
On January 28, WTI bottomed at a little over $44. It rose, but then fell back on March 17 to $43. That was the bottom. It is now above $59.
I do not think it is going back into the $30’s in this phase of the business cycle. A recent MarketWatch article said that it may.
The free market is capable of meshing supply and demand.
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