In the final issue of Energy & Income Advisor for 2020, “Rock Bottom Prices Ready to Rise,” we outlined a constructive view for crude oil prices based on three primary drivers: The ongoing recovery in global demand, OPEC+ willingness to maintain historic production cuts and US shale producer discipline.

Our view proved correct, though conservative.

Indeed, demand recovered even faster than we’d expected, OPEC+ has maintained deeper production cuts for longer than we though they might, and US shale producers have held firm on CAPEX plans despite the temptation of higher oil prices.  As a result, our $60+/bbl oil target at the end of 2020 – then at the high end of Wall Street estimates – was exceeded by the middle of February.