Oil’s Bull Market in a Month

Oil has rallied as much as 50% in little more than a month, since the second bottom of the double-bottom formed in January and February. This was the “sloppy bottom” we expected. It’s probably time for a short-term correction here, but we think global oil prices will work back to our expected range of $45 to $60 over the year. At the bottom, oil was priced to perfection in an imperfect world. Iran’s post-sanctions exports have disappointed. OPEC production is flat, while the cartel and Russia rattle sabers with talk, however silly, of a “freeze.” Terrorism continues to imperil supply. And the mighty engine of US production has now definitively rolled over, with the worst yet to come.