How high can oil prices go? - NBF

"Oil prices have been on a tear since last summer as an improving global economy helped absorb excess supply of the commodity," National Bank of Canada senior economist Krishen Rangasamy notes.

Key quotes

Does that mean WTI oil is heading to $70/barrel or higher? Demand/supply fundamentals are currently favourable to oil and could indeed lift prices further over the near term. But the higher WTI goes, the more brutal the subsequent decline is likely to be.

WTI oil is now high enough above break-even prices for the marginal producer (i.e. shale oil players) to rekindle output from shale oil. The last time there was such a spread between WTI and shale breakeven prices, the global oil market turned, in the space of just a few quarters, from excess demand to excess supply.