Is Oil Priced to Perfection Again?

https://trendmacro.com/system/files/reports/20170509TrendMacroWarren-L5.pdf
Donald L. Luskin
Michael Warren
Tuesday, May 9, 2017
Earth to oil! Permian running out of pipes. Inventories correcting. OPEC cuts extended.
Oil
We are disappointed by the recent move by oil to the low $40’s. We recognize that our price target of $65 has a sell-by date, that it is eroded every day by the secular technology revolution in fracking that we ourselves have celebrated. But in the cyclical timeframe, the shadows of the 2014-2016 crash – global CAPEX underinvestment and OPEC cuts, and political instability in producer nations – argue for higher prices. The seeming surge in US shale production is the exploitation of low-hanging fruit, and cannot be extrapolated. Seemingly high inventories are in part due to hedging at the onset of unanticipated supply cuts, and are now beginning to come down in a season when they should be rising.
Section: 
TrendMacro
Author Override: 
Michael Warren and Donald Luskin