Black gold’s fate

“Oil kindles extraordinary emotions and hopes, since oil is above all a great temptation. It is the temptation of ease, wealth, strength, fortune, power. It is a filthy, foul-smelling liquid that squirts obligingly up into the air and falls back to earth as a rustling shower of money.”

Ryszard Kapuściński

BROUGHTON, EDINBURGH – Kapuściński wrote that back in ‘82, in his great book Shah of Shahs.

Does oil still kindle those “extraordinary emotions and hopes” today, I wonder?

I guess it depends where you are in the world – and who you ask.

I’d like to know what you think – so let’s run a quick poll.

I said back in March that I think oil will hit $100 a barrel before the year is out (see: Buy on the sound of cannons drone strikes).

The price today is around $70 – the same as it was back then! We’ve still half the year to go, and I’m still confident in my call, for reasons I’ll go into – but what do you think?

Are you bullish on oil?

Just click whichever you agree with, and then come back to this email.

It’s interesting to see oil higher than it was pre-pandemic, despite the world still not being quite “back to normal” (employment has not recovered, and air travel is less than a shadow of its 2019 self):

And yet despite the return of 2019 prices, if we take a look at the number of oil rigs out there (this index is US only), we’re nowhere near 2019 levels:

If prices are already where they were pre-WuFlu, when the world still hasn’t fully woken up yet… and the rigs aren’t there to flood the market with supply… I think “black gold” still has plenty of shiny upside.

More to come…

Boaz Shoshan
Editor, Capital & Conflict

Category: Investing in Gold

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