In This Article:
Crude oil prices (CL=F, BZ=F) are seeing a boost after the US and China agree to pause their reciprocal tariffs for 90 days, while gold (GC=F) edges lower Monday morning.
DoubleLine portfolio manager and strategic commodity strategy Jeff Mayberry talks about the price outlook on these commodities.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
Oil prices rising this morning while gold retreats after news the U.S. and China have reached a temporary deal to remove reciprocal tariffs for 90 days while negotiations continue. Joining me now Jeff Mayberry, DoubleLine portfolio manager, strategic commodity strategist. Really appreciate you joining us this morning Jeff. We are still below profitability levels for US shale oil producers. Where do we go from here on oil prices?
Yeah, I think it's interesting. Or thanks for having me and I think it's interesting that you've you've you've hit on that point of you know, shale producers have really cut back on their capital expenditures. And the market's pricing in less probability of a of a recession today. So I think you could see a pretty good bounce here in terms of oil prices on you know, if we get a trade deal or if the trade deal continues, that you could see the demand side continue to pick up and oil could could bounce from here. Um you know, probably doesn't get to you know, a 70 handle or so, but really could see it in that kind of mid to high 60s.
What's next for gold? Is that rally overdone at this point?
Well, it's interesting. Gold has been uh you know, a lot of central bank buying. Uh but you really haven't seen too many retail uh too much retail buying in the in the gold market yet. And so, you know, to the extent that people get a little bit more scared of a recession, uh to the to the extent that they get a little bit more worried, you could see some more retail buying in gold, like the the retail ETF shares are below where they were 2022 and well well below where they were in 2020. Uh so I think that you could see a you know, a slight pause here in gold prices, but um if people get a little bit more scared, then you could see retail money get back into gold. They get scared of recession, especially. I mean of inflation, you can see them really get back into gold and you could see gold get up here uh to to the high 3000s, maybe even like a 4,000 level on gold.
And my guest host Kevin has a question for you.
Hey Jeff, I just wanted to get your sense quickly on oil again. Um the the dynamics of supply and demand in terms of what's going to be a bigger driver this year. Um especially as we try to figure out as you try to figure out some sort of ceiling for for Brent. Um how are you thinking about maybe supply dynamics being a little bit of a stronger force than demand at this point?
Right. I mean you you did see OPEC Plus come in, they they raised their production or they they reduced their cuts to production. Uh and there's only so much really they can do. Um I think if you get uh you know, shale, US shale kind of being almost a marginal producer these days, uh if you get prices up to like that $65 a barrel then the you know, the Kansas City Fed says that's the profitability line for for US shale. And so I think you could see some more uh you know, more production there uh at a US shale. So that kind of puts the um you know, that's why I kind of say kind of high 60s as as the ceiling because I think US production will continue or the supply will increase if we get above that $65 level from that WTI. So you know, Brent's at 65, so they'll probably call Brent at 70 at that point.
Jeff, thank you so much. Really appreciate it. Huge thank you to Kevin Gordon for joining me for the hour as well.
