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Oil Prices Could Head Back Over $50 Before Year End

Jul. 13, 2017 1:55 PM ETUSO5 Comments
HiddenValueInvestor profile picture


  • Growing U.S. petroleum exports could balance U.S. oil supply and demand more quickly than the market expects.
  • Oil and fuel storage in the U.S. could return to the middle of the range of the five-year-average based on the growth in exports.
  • The easiest and most direct way for investors to participate in a near-term rise in oil prices is to buy shares in the United States Oil Fund on the stock-market.

A surge in exports of oil and finished petroleum products could send West Texas Intermediate crude oil prices back over $50 per barrel before the end of the year. A recent New York Times article highlighted the new oil export terminal in Corpus Christi, Texas. According to the paper, "Suddenly buyers from all over the world are purchasing the new American supplies, from South Korea to India - even oil-rich Venezuela, which uses the light sweet crude that comes out of American shale to blend with its gooey heavy crude. The light crude is highly prized even while global oil markets are saturated."

Below is a picture of an oil tanker entering the port at Corpus Christi. The photo is by Brandon Thibodeaux for The New York Times:

Light sweet crude oil has less sulfur than sour oils, and takes less time and is easier to refine than heavy oils. The lighter and sweeter the better. And some of the lightest and sweetest oil in the world is West Texas Intermediate produced in the U.S.. Just take a long look at the chart below and consider how U.S. oil available for export compares to other oils around the world:

It is not clear how much ultimate demand there will be globally for West Texas Intermediate oil. That is because Congress only passed a bill in December of 2015 to lift the 40 year ban on crude oil exports. The first shipments did not start until January of 2016. The country has only been building export infrastructure and soliciting customers for one and half years. But those efforts are rapidly producing fruit.

Here is a look at tables and charts from the most recent EIA Weekly Petroleum Storage Report:

The print on the table above may be small and hard to

This article was written by

HiddenValueInvestor profile picture
Master of Arts Academic, Individual Investor

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