To: Goose94 who wrote (173534 ) 8/16/2024 8:47:18 PM From: Goose94 Read Replies (1) | Respond to Crude Oil: Energy is the top performing sub-index in Canada year to date (YTD), has created generational wealth for some over the past four years, and is supported by ongoing constructive fundamentals, yet remains a contrarian investment. This is perplexing. Despite (once again) recessionary worries and obvious weakness in Chinese diesel demand, oil demand remains “fine,” up about 1.2 million Bbl/d. “The real story is on supply: U.S. shale production growth is imploding while OPEC+ is unlikely to begin to return curtailed volumes in October as advertised given its propensity for being “preemptive, proactive, and precautionary” and its ability to stay nimble to market vagaries.” Even assuming the full return of OPEC+ barrels as advertised, which is not our base case, we believe oil has a fundamental floor of around US$80 West Texas Intermediate (WTI) given that “days of supply” of global oil inventories will stay below normal levels.
