The Secret To Predicting Oil Prices – And Cutting Through The “Expert” Hype

If you turn on the TV today, you’re likely to see only two kinds of oil price “predictions.”

One is the wishful “thinking” of those who claim a further spike in oil prices up to $60 a barrel is coming.

The other is the baseless (and self-serving) “warnings” of another dive to $25 a barrel.

The reality of the oil market lies in the middle – a narrow trading pattern in the $40s, with the floor rising slightly through the end of June.

This price stability is enough to provide some very nice investment opportunities moving forward. The days when oil has to be at $80 for average individual investors to make money are long gone.

So let’s pull back from the smoke and mirrors offered up by the so-called “experts,” and look at what’s really happening.

To form realistic expectations about oil prices, there are four factors you need to know.

The second one threatens thousands of jobs here at home…

Geopolitical Risk is Once Again Key

Now, bear in mind that these four factors will dictate where oil goes as long as geopolitical factors don’t distort the market.

Of course, the outliers of global events are themselves becoming an ongoing element in the determination of what is likely to happen in the market. For example, they are already a mainstay in my (or anyone else’s) risk assessment matrix on oil.

Nonetheless, there remains a proper foundation for forecasting price – and it’s not a crapshoot of hype, or the spreading of implosion fears.

The former serves the interests of cash-strapped private producers, often one step ahead of the sheriff (or the bank holding their unsustainable debt load). The latter comes from short artists who often are doing nothing other than playing upon investor angst to scream that the sky is falling.

Both amount to unrealistic expectations – either that the market will snap back quickly (at least in terms of price) or that a quick return can be gained from convincing folks like you that this is the end of traditional oil profits.

Instead, here’s what’s really happening…

Recent Supply Disruptions are Temporary