Josh Young, founder and CEO of Bison Interests, reports that global oil inventories are depleting at an accelerated rate. According to his analysis, less than 10% of global stockpiles may be currently usable, leaving the market highly vulnerable to potential supply shocks.
Young estimates the fair value of WTI crude oil at approximately $105 per barrel. He notes that even potential geopolitical developments, such as a peace deal with Iran, may not provide long-term relief for the energy market due to the current state of infrastructure and supply constraints.
The analysis highlights significant pressure on refined products, specifically noting that diesel prices could reach $200 per barrel. Young points to Russia and China as key factors driving the current diesel squeeze, while dismissing the likelihood of a US export ban on the fuel.
Bison Interests identifies specific small-cap oil producers as currently undervalued assets within the energy sector. Young suggests that government policies and macroeconomic factors, including Federal Reserve interest rate hikes, will continue to influence market volatility and currency stability.
