The oil market is very strong right now. Brent crude oil, the international benchmark for oil prices, broke through $70 a barrel level for the first time since December 2014.
Fox Business Network contributor PriceGroup.com's Phil Flynn said he believes we'll see $70 a barrel of West Texas Intermediate crude oil.
He predicted $60 a barrel six months ago because he knew shale oil had limitations and wasn't strong enough to overcome OPEC production cuts; yet producers can't make money unless prices are higher.
“I know OPEC was desperate. I know Saudi Arabia had an IPO coming up, they couldn’t afford lower prices, so I knew that the OPEC cartel and non-OPEC with Russia would adhere to production cuts, and I think they’ve amazed the world and that’s why the price of oil is amazing a lot of people” said Flynn.
It was a different attitude six months ago when people thought gas prices would stay low. Now, the record oil glut has gone away. In fact, supply is average and demand is above average.
“Global demand is on fire. US oil supplies are in the average range for the first time in years, so we don’t have an oversupply of oil,” said Flynn.
He said if we keep going at this pace, supply will be below average in no time.
We are headed into seasonal maintenance season, where we switch from winter to spring fuel blends. Typically, demand drops off during this period.