Matt Badiali is a financial analyst who specializes in natural resource investments. He works for Banyan Hill Publishing and has helped his subscribers to make wise investments in the resource sector. One of his investment picks has been oil. He listed reasons that he felt oil prices were going to rise. The main catalyst that he listed for higher oil prices were the sanctions that the Trump administration placed on Iran. The sanctions officially went into effect early in the month of November. To the astonishment of many, oil prices did not react as many had thought they would. Matt Badiali has been closely monitoring the oil market, and he lists the factors that have been the reason oil has not been on the rise.
Saudi Arabia and the United States both increased oil production right before the sanctions took effect. Many in the market now feel that oil supply is high enough to offset the sanctions. Matt Badiali also points out that the sanctions will not take full effect for another six months. There are eight countries that are still allowed to buy Iranian oil and have a six-month adjustment period. These counties will not be punished for purchasing Iranian oil until the grace period has passed.
The Trump administration is worried about higher oil prices and the effect it would have on the Us economy. However, they feel that their efforts to place economic pressure on Iran will be enough without causing chaos in the oil market. Matt Badiali disagrees with the view of the Trump administration. According to his research, Iran will be producing almost 900,000 barrels of oil a day less than its current production after the six-month grace period. He also points out that Venezuela is failing as an oil producing nation and the country is producing substantially less oil than they did just a few years ago. He sees this trend continuing while global demand for oil is on the rise. He feels that it will be during the summertime that consumers in the United States begin to feel the effects of higher oil prices.
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