by Michael Tarsala
The group previously held an $85 target for crude through the early summer months.
Two main factors are pressuring prices to the upside:
- Seasonally high gasoline demand amid summer vacations and college students returning to school.
- Enforced EU sanctions on Iran, the world’s 5th-largest oil producer, that could bottleneck short-term supply and result in a price premium.
Pressures keeping oil from rising even higher include:
- Production increases of domestic tight and shale oil, especially from the Bakken and the Eagle Ford shale regions.
- A strengthening dollar amid European weakness. Crude is priced globally in dollars. A rising dollar effectively decreases oil prices in the U.S. relative to other countries (or at least acts to slow oil's price appreciation).
Kocon believes that oil prices will rise even higher over time. As a result, many unconventional energy companies may be very undervalued based on future oil prices.
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At Covestor, we can set you up with your own separately managed account (your money is separate from everyone else's) with very low investment minimums.