According to a poll I ran, the plurality of folks think WTI ends the year around $85-95 per bbl. There’s an interesting narrative that supports this belief.
Over 250 votes were cast, which gives us some real volume to work with.
The “winner”, as it were, was $85-95 per barrel.
To be fair, I first posted this poll last week, a few days before the US-Iran agreement was announced on Sunday.
Still, I think all of us were prepared for some kind of near-term settlement. President Trump had been publicly angling for a deal for weeks.
The real issue, as I wrote in the post accompanying the poll, was whether things were going to quickly and smoothly normalize or not.
The nuclear issue, likely the thorniest of the negotiating terrain, is not resolved in this initial agreement.
The plurality of votes in this poll land around a sensible narrative that, given the profound lack of trust between the US and Iran, it’s quite easy to imagine a tumultuous path ahead.
You don’t have to get to full-on war to average in the high $80’s by year end.
All you really need is Iran choking the Strait of Hormuz in some nontrivial way because they believe the US isn’t negotiating in good faith, or the Israelis aren’t abiding by an understanding, or shippers are underpaying the “fees” that Iran expects to capture, or any number of other reasons.
It’s not that a quick, smooth road to full recovery is impossible. Clearly both the Americans and the Iranians are highly motivated to make a deal here.
It’s more that the definitions of victory that the two sides seem to have firmly carved out have terribly little common ground.
And with little common ground comes the potential for ongoing bouts of disruption.
My poll in the field right now is around how we should expect the US rig count to respond by year end to oil prices that have fallen aggressively since Sunday’s announcement.
If you haven’t cast a vote there, you can find it via my profile. I’d love to know where your compass is pointing on that one.
