"The odds of oil at or north of $150 is 20%, with a 3% chance of oil hitting $200 or higher. That's high, alarmingly high, and could entail even bigger price hikes at the local gas station."
"The Strait of Hormuz might need to stay closed for a few more months, trapping much of the world's oil supply. Add other geopolitical unknowns into the equation, and perhaps a non-zero chance of $200 oil is worth hedging against."
"Just because $150-200 oil can happen, though, doesn't mean you should back up the truck on shares of junior oil companies, especially since they're already coming in hot."
Oil prices are currently around $115 per barrel, influenced by escalating tensions in Iran and President Trump's threats. Investors face a significant risk of prices spiking, with a 20% chance of exceeding $150 per barrel and a 3% chance of reaching $200. The closure of the Strait of Hormuz and other geopolitical factors could contribute to these price increases. However, investing heavily in junior oil companies may not be advisable, as high oil prices could negatively impact businesses and consumers, leading to economic stagnation and inflation.
Read at 24/7 Wall St.
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