Technical Analysis (Keith Richards)Unable to post the entire article so here's the link. GLTA https://www.adviceforinvestors.com/news/market-outlook/tsx-is-commodity-heavy/ TSX is commodity-heavy
Oil is one of my top sector picks for 2023. I am bullish on oil for a number of reasons. JPMorgan Chase & Co. recently noted that U.S. President Joe Biden’s latest Strategic Petroleum Reserves (SPR) drain will see our southern neighbours exit 2022 with the "lowest oil reserves since July 1983”.
Let’s think about this for a moment: The United States is the largest consumer of fossil fuels in the world. If you are "Team Biden" and you want lower oil prices into the November mid-term elections, you drain the SPR now (because of more supply on the market, from the SPR). So…that’s what they have been doing for the past number of months – a myopic and politically driven energy policy.
But, again, if you are "Team Biden", and you care about the 2024 presidential election, you must refill at least 30 per cent to 40 per cent of the SPR drain (according to The Bear Traps Report investment newsletter). This would need to occur after the mid-terms, and completed significantly before the presidential election. Thus, SPRs will be refilled after the mid-terms in November 2022 but well before Oct 2024! In other words, largely in 2023!
This, logically, suggests increased demand and rising energy prices during 2023. Refilling the SPRs will create significant demand. West Texas Intermediate (WTI) crude oil prices should rise. If you are Team Biden, you don’t want that at the cusp of the 2024 election! You want that Band-Aid ripped off and the pain over with well before the election! In other words, in 2023.
Adding to this reality is the rather poignant comment coming from Saudi Arabia after the Biden administration authorized the release of another 15 million barrels of crude from the U.S. Strategic Petroleum Reserve. Prince Abdulaziz bin Salman Al Saud, the Kingdom’s oil minister stated, "It is my profound duty to make it clear to the world that losing emergency stock may become painful in the months to come. Running out of capacity has a much dearer cost than what people can imagine."
War in Ukraine exacerbates high oil environment
Next, a Bloomberg report on Ukraine war adds to my case for higher oil prices in 2023, stating, "(The) Ukraine conflict escalation seems closer...(it) could get much worse in a couple of months."