Saudi Arabia would like to see oil prices at $80 or even $100 a barrel — and that’s “icing on the cake” for the resurgent market, according to at least one analyst.

Crude US:CLM8 hit a 3 1/2-year high yesterday, lifted by U.S. supply surprise and by optimism about a renewal of the OPEC deal on Friday. There’s no signs of stepping off the gas this morning.

“Supply disruptions and lower U.S. inventories make a very compelling argument to enter or stay long oil, even at these lofty levels,” says Stephen Innes, senior trader with OANDA, told clients in a note Thursday.

But pay heed, all ye bullish oil investors, to our call of the day from Tamas Varga, analyst at brokerage PVM Oil Associates. Varga thinks the House of Saud is not likely to get its $100 wish come true any time soon, partly because there’s still too much oil sloshing around right now.

Deserving of such a run? MarketWatch

“Next year looks tighter than 2018, and with prolonged high compliance from the 24 producing nations, $80-$90/bbl oil prices are a real possibility,” he notes.

“Until then, do not exclude the potential for a violent downside correction,” says Varga.

Why “violent”? The analyst says there aren’t enough fundamental factors underpinning oil’s current run, given that U.S. supply is still high (but see Is U.S. shale boom hitting a bottleneck?).

Instead, the uplift has come from geopolitics, Varga says. So brace for a pullback, barring three big things: Venezuelan oil production keeps falling; Iranian sanctions are reintroduced and Persian Gulf OPEC oil production takes a hit; or the Syrian crisis ramps up.

Naturally, $100 oil would do nicely for the Saudis, ahead of next year’s Aramco IPO and as they try to whittle down the country’s huge debt. But they should be careful what they wish for.

“Saudi Arabia can push the price to $100 if it keeps supply sufficiently tight,” Carsten Fritsch, analyst at Commerzbank, tells MarketWatch. “But it won’t be without paying a price in the long-term, i.e. causing a new wave of shale oil and oil from other sources.”

Key market gauges

In early action, the Dow DJIA, +0.51% S&P 500 SPX, +1.05% and Nasdaq COMP, +1.71% are trading lower. European markets SXXP, +1.35% are edging up amid an earnings flood. Asia ADOW, +0.23% got a nice boost from oil prices.

Gold US:GCM8 is off a bit, while dollar DXY, +0.01% is steady.

See the Market Snapshot column for more.

The buzz

Amazon AMZN, +5.69% is up 2% in premarket after Bezos revealed in a letter to shareholders that Prime membership is now 100 million members strong worldwide.

Takeda Pharmaceutical 4502, -1.65% says Shire UK:SHP US:SHPG rejected its $60.38 billion takeover offer. Shire has been running higher on that news.

Procter & Gamble PG, +0.91% will get vitamins and food supplements in a $4.2 billion deal for Merck’s MRK, +0.88% consumer-health business.

Read: Fox rejected Comcast’s richer bid over antitrust worries

Following in Google GOOGL, +2.07% and Apple’s AAPL, +1.57% footsteps, Facebook FB, +2.66% plans to design its own chips. And Netflix NFLX, +0.78% appears to be thinking about buying a theater chain owned by investor and Mavericks owner Mark Cuban.

Intel INTC, +0.46% is calling it quits on augmented-reality and consumer wearables as it shuts down its New Devices Group.

More airline scares as a Delta DAL, +1.34% flight was forced to turnaround en route to London amid engine trouble. Meanwhile, a fan blade and engine cover are being examined by investigators looking into the Southwest LUV, +1.59% emergency landing and passenger death.

On the economic front, weekly jobless claims stuck to a 45-year low, while the Philly Fed manufacturing index pointed to continued growth. Still to come are leading economic indicators. The Fed speakers keep coming with Lael Brainard, Randal Quarles and Loretta Mester on deck.

Earnings

Procter & Gamble is getting an earnings lift, along with Bank of New York Mellon BK, -1.44% , Blackstone BX, -0.83% and Philip Morris PM, -1.07% are also due to report. Other gainers include American Express AXP, +0.31% and Alcoa AA, -0.73% up on growing aluminum demand and an earnings beat.

The stat

Amazon.com founder and CEO Jeff Bezos Getty Images

$28,446 — That was the median wage for Amazon employees in 2017, according to an SEC filing by the company Wednesday.

Meanwhile, CEO Jeff Bezos’s compensation was worth 59 times that amount — $1,681,840 for last year. Almost all of that is money paid out for personal security. His salary was $81,840.

Check out: Bezos says Amazon employees should start meetings by reading memos ‘with the clarity of angels singing’

The chart

Nickel prices hit multiyear highs in London Thursday, in a run that has been driven by fears Russia’s Norilsk Nickel will get swept up in U.S. sanctions. Nickel’s a big component in electric-car and smart-phone batteries. Aluminum has also been on a run, after sanctions hit one Russian billionaire who owns a big stake in producer Rusal 486, -2.89% .

Here’s nickel’s eye-popping April gains, making it our chart of the day.

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The Senate will now let babies on the chamber floor, thanks to Sen. Tammy Duckworth

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