Pierre Andurand oil forecast for crude throws the inflation cat among the pigeons, bearing in mind the price of crude oil impacts the cost 0f everything.
Remember Pierre Andurand, the iconic hedge fund oil manager who made a killing when crude oil dipped into negative territory, during the 2022 pandemic global lockdowns when oil brokers were paying buyers to take the commodity off their hands.
Demand destruction lockdowns style meant a scarcity of storage silos and at 20K plus USD a day to charter an oil tanker, that made storing crude on board unviable unless you had a risk-on sympathetic banker (something of an oxymoron) willing to provide unlimited credit lines.
So for the first time in history, black gold became a liability in April 2020, as the price submerged into negative 40 USD a barrel in the spring to then rocket-propelled in the mid-forties by December.
For seasoned oil traders with the constitution of a gambler, this extraordinary and unprecedented event presented the trade of a lifetime.
That year, 2020 Pierre Andurand bagged triple-digit gains when most of his contemporaries were forced to shut up shop.
“Pierre Andurand oil forecast for crude throws the inflation cat among the pigeons, bearing in mind the price of crude oil impacts the cost 0f everything”
WEALTH TRAINING COMPANY
Pierre Andurand oil forecast for 2023 is bullish and that is a headwind on inflation
Forecasting crude oil prices is like playing blackjack. There are so many dots to join, economic business cycles, liquidity cycles, supply-demand issues, and the wild card, dots you can not see, natural disasters, pandemics, geopolitics, sanctions, and war.
Pierre Andurand took to the Twittersphere, ) on December 29, 2022, to thrash out his bullish case for crude oil this year.
So China, the world’s largest manufacturing and exporting economy, is reopening following its “post-covid-zero” policy.
“Global oil demand could soar as much as 4% at some point next year (2023) if the world fully emerges from Covid restrictions,” he wrote.
Pierre Andurand noted that consumption has been lagging long-term trends and, boosted by a switch to oil from gas, may increase by 3 million to 4 million barrels a day in 2023.
Pierre Andurand’s main commodities fund crushed the competition again, rising about 50% in 2022. Pierre Andurand and a few other commodity traders made blowout profits in 2022, betting on supply chain disruptions that Russia’s invasion of Ukraine would lead to jumps in oil and other commodities.
“Global oil demand could soar as much as 4% at some point next year (2023) if the world fully emerges from Covid restrictions”
Pierre Andurand in March incorrectly predicted that oil would hit $200 by year-end as Biden’s drain sends the SPR to record lows.
The electrification of mass transport has displaced 600,000 barrels a day of fuel use but net demand, particularly from topping up strategic reserves is likely to offset this drop.
The demand side for oil depends on the duration and depth of the global recession in 2023
Pierre Andurand oil forecast for crude is bullish short term and bearish long term.
“The main reason why we might not meet the trend line again is the growth of EVs. From 2019 to 2023, 35 million new EVs will have been sold. This roughly represents a loss of 600kbd of oil demand. Another shock to oil demand is the effect of the Russian invasion of Ukraine. 4/6,” tweeted
AndurandPierre) December 29, 2022.
“So, overall, the potential to see a surge of oil demand of 3-4mbd sometime in 2023 is there, assuming the world reopens fully. 6/6,” he wrote.
“We know long-term macro trend electrification of mass transport is the early stage of the innovative wave, which is already causing a fall in crude oil demand and is likely to continue” – Wealth Training Company
Pierre Andurand oil forecast for crude is bullish based on exponential global population growth
“World population also increased by 280 million people between 2019 and 2023,” he wrote.
Supply-side reasons are also why Pierre Andurand oil forecast is bullish for 2023.
Wall Street banks now widely expect that crude prices, trading near $82 a barrel in London, will advance next year as sanctions squeeze Russian supplies.
Indeed, the EU’s ban on Russian oil products set to come into force on February 5 could lead to a 1 million barrel per day drop in Russian crude oil output for the New Year.
Russia has also warned it could cut production by up to 700,000 bpd as it responds to the $60/barrel price cap on its oil implemented by the G7 in December. Moreover, according to Energy Intelligence, Russian refineries are already struggling with a labor shortage due to conscription due to the war in Ukraine. Russia is sending 90% of its crude oil to Assia.
So Pierre Andurand’s forecast is bullish for oil in 2023 due to supply constraints, the war in Eastern Europe which is contributing to manpower and part shortages, sanctions, and oil being rerouted along the silk road.
Demand could be supported by countries rebuilding their strategic reserves and China’s economy fully opening in a post-zero covid era.
The second half of 2023 is likely to see crude oil prices impacted by the extent of the global recession.
We know long-term macro trend electrification of mass transport is the early stage of the innovative wave, which is already causing a fall in crude oil demand and is likely to continue.
But Black Swan wild cards influencing oil’s short-term price, the Israel-Iran war, freak weather, natural disasters, and another lockdown pandemic. Think about it. If rate hikes can not destroy demand to dampen inflation without triggering global unrest, then lockdowns and curfews are a controlled, planned way of resetting and reconfiguring the system.
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