Matt Badiali Feels Higher Oil Prices Are Six Months Out
The sanctions that have been placed on Iran took effect in early November. The Trump administration is trying to force Iran to come up with a new deal regarding nuclear program. These sanctions will punish any country that tries to do business with Iran and are meant to apply as much economic pressure as possible. One fear of the Trump administration is that oil prices could potentially get out of hand, however, they feel that they could apply these sanctions without causing oil prices to skyrocket. So far, the oil market has remained calm, even though the sanctions are now in effect. One analyst who believes that oil is still about to rise in price is Matt Badiali. He stands by his call that sanctions are going to put upward pressure on the price of oil, but he explains to his subscribers why oil is not making its move yet.
Matt Badiali told his subscribers that Iran is still able to export its oil for another six months to a few counties and is the reason oil prices have not risen. This is a grace period the United States is giving these countries. After the six months, however, these countries will not be able to purchase Iranian oil without a penalty. Matt Badiali also points out that both the United States and Saudi Arabia increased production right before the sanctions took effect, and the extra oil has created a surplus for the time being.
Matt Badiali feels the Trump administration should not celebrate these lower oil prices because he feels they won’t be around long. He anticipates that Iran will be adding almost a million barrels of oil a day less to the global markets once the six-month grace period officially ends. He says that Saudi Arabia and the United States will not be successful in filling this gap. He also explains that the world will not be able to rely on Venezuela to help add more oil to the global markets. Matt Badiali is predicting oil to jump over $100 a barrel as soon as the summer comes, which is around the time the six-month grace period to buy Iranian oil ends.
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