I lean to the thesis that modelling of oil prices is a fool’s game, as it is for most commodity markets and the time-charter rates of tankers and dry-bulk ships.



My master’s thesis dealt with an application of Bayesian decision analysis to the evaluation of a new copper mine. The copper price generated about 90% of the project’s financial risk. The project manager, a geologist, did what he knew: drilled more holes to prove ore reserves.



But there are ways that involve more strategy than forecasts.



Go against the cycles. A mining company I worked for developed a new base metal mine (mostly copper) that paid off its debt within two years. Its financial types followed Kondratieff waves, an area I consider voodoo economics. But it forced them to think cyclically; whatever works for you….



Where are you on the world cost curve? Saudi Arabia is toward the bottom for oil; the Canadian oil sands at the other end.



How scary is your environment? If scary, it is probably a good time to invest. Think January 2016 and late 2008 to early 2009 for commodities and equities. In the latter period I bought equities and went on margin by mid-2009; my business partner bought a trucking company.