No, Oil Will Not Rise to $120

Last week, Israel attacked Iran. In response, Iran sent over 100 drones to attack Israel. Crude oil prices soared, closing near $73.00 on June 14. Commodities analyst Natasha Kaneva issued a $120/bbl price target scenario.WTI crude rising to that level is unlikely.The analyst set a baseline oil price target in the low-to-mid $60s in 2025 and $60 in 2026. The scenario for $120 requires a worst-case scenario playing out. The stock market is already priced in the geopolitical risks. For oil prices to rise, OPEC+ would need to stop increasing its exports.The escalating conflict between Israel and Iran will not disrupt the demand/supply dynamics for oil. The global economy has excess oil supplies, hurting prices. Still, shares of Exxon Mobil (XOM), ConocoPhillips (COP), and Chevron (CVX) jumped last week. Value investors who recognize the discount in those companies should continue buying shares. Oil stocks are cheaper than technology stocks. Microsoft (MSFT), for example, trades at a price-to-earnings ratio of around 37 times. After Exxon's stock rallied, its P/E closed below 15 times last week.The oil and gas stocks have more upside from here. Occidental Petroleum (OXY) is in a good position to break out of its yearlong downtrend. OXY stock bottomed in April at below $36. Its 52-week high is $64.75. If oil, prices held $80 or more, that is enough to lift Occidental stock beyond the yearly high.