As gasoline prices rise at the pumps, Americans are feeling the pinch, but the oil price bulls are having a field day. Oil price predictions have been running hot lately, spurred by production cuts from Organization of the Petroleum Exporting Countries (OPEC+) nations like Saudi Arabia and Russia.
Another oil-bullish factor is rising military tensions between Azerbaijan and Armenia. Azerbaijan is known to be a producer and exporter of oil and natural gas, so tensions there could impact the delicate supply-demand balance.
Oil Price Predictions: A CEO Weighs In
With these factors in mind, some experts are bracing for further spikes in the West Texas Intermediate (WTI) crude oil price. For example, OANDA Senior Market Analyst Craig Erlam recently warned:
“This oil rally has been relentless and I’m not seeing any signs of exhaustion yet […] [It’s] been an impressive move and there could be more to come.”
Don’t get the wrong idea. You may occasionally hear calls for a pullback in petroleum prices. One example of this comes from Christopher Lewis of FX Empire, who seems to suggest that a pullback into the $80 range is due.
That doesn’t appear to be the majority opinion among experts, however. ANZ analysts envision an oil-market supply deficit of 2 million barrels per day in this year’s fourth quarter. Consequently, the per-barrel WTI crude oil price could “stabilize above the $90 per barrel mark.”
Citi analysts are decidedly oil-bullish, as they expect that Brent prices could surpass $100 per barrel this year. Even Chevron (NYSE:CVX) CEO Mike Wirth has weighed in with a bullish call, stating his expectation is that oil will cross above $100 per barrel.
What You Can Do Now
Will oil hit $100 in the near future? It’s hard to know for sure. Trading oil futures is challenging, so most retail traders probably shouldn’t attempt it.
What does all of this mean for investors? Even with oil price predictions running high, it may not be prudent to go all-in on oil stocks. Instead, consider the possibility that inflation could jolt higher. That, in turn, might prompt the Federal Reserve to continue raising interest rates.
The result could potentially be a pullback in high-flying Nasdaq stocks. Thus, investors may choose to ease up on “Magnificent Seven” names like Nvidia (NASDAQ:NVDA) and Meta Platforms (NASDAQ:META). Instead, this would be a good time to focus on defensive stocks, such as Coca-Cola (NYSE:KO), Walmart (NYSE:WMT) and Procter & Gamble (NYSE:PG).
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.