I bought oil well below $10 and now I am trying to figure out when it would be a good time to close my position...so, with a long term picture in mind, I'd love to get your opinion on how likely a "super-spike" scenario is to materialize:
"IEA expects Q4-2020 demand to be just 2.4 million barrels below that of Q4-2019. If that happens to be an accurate prediction we will go into Q4-2020 with 2.5 million barrels per day supply deficit and that’s assuming OPEC just goes back to producing what it did in February 2020, i.e. not enforcing any additional cuts. The key point though is that the supply lost in the non-OPEC world will have a very hard time coming back online at prices under $65-$70/barrel. Taking this idea out further, at some point when the world normalizes and demand returns back to where it would be if COVID-19 had not happened, the supply deficit could be rather incredible to the tune of 6-8 million barrels/day. In 2008 the super-spike of $140/barrel was caused by a 1.0-1.5 million barrel/day shortfall. What happens if we get something five times as large?"
"IEA expects Q4-2020 demand to be just 2.4 million barrels below that of Q4-2019. If that happens to be an accurate prediction we will go into Q4-2020 with 2.5 million barrels per day supply deficit and that’s assuming OPEC just goes back to producing what it did in February 2020, i.e. not enforcing any additional cuts. The key point though is that the supply lost in the non-OPEC world will have a very hard time coming back online at prices under $65-$70/barrel. Taking this idea out further, at some point when the world normalizes and demand returns back to where it would be if COVID-19 had not happened, the supply deficit could be rather incredible to the tune of 6-8 million barrels/day. In 2008 the super-spike of $140/barrel was caused by a 1.0-1.5 million barrel/day shortfall. What happens if we get something five times as large?"
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