Can We use Historical Oil Price to Plan for the Future?

On March 30, the WTI oil price* traded below US$ 20 dollars for a few hours. Historically, WTI oil price, inflation-adjusted, is rarely trading below US$ 20.0. 

March 2020 recorded at $20.48 if this is as low as it will get, then when we should expect the recovery to double the price or more?

In the last 50 years, a similar low price took between 7 to 15 months for the oil price to double. 

Learning from history, and to keep it simple*, we can plan for oil price between US$20 and US$40 for 2 to 5 quarters, and we should prepare for oil price >= $40 then.

* Notes on oil price & influences complexity;

Two factors influence the oil price: (1) Supply and Demand, and (2) Market Sentiment.

We would expect the available production from significant oil provinces to drive the the supply, such as the OPEC, Russia, and the USA unconventional. However, it is not that straight forward, as the midstream and downstream add other factors, including trading routs by pipeline or shipping, required crude type for refinery and refining capacity. 

The same story applies to the demand, which is not only dependent on technical demand data from different sectors like transport or industry. The oil price is set-up oil future binding contracts. Those are buying and selling contracts that drive the demand up or down. The people (traders and investors) are subject to market psychology. News on geopolitics, global economy, wars, civil unrest, terrorist attacks, and similar shapes have a significant impact on market psychology behind the real outcome of the events itself. 

Market Sentiment is the perception of investors toward the financial market, commodities, and particularly oil. Again, crowd psychology plays a significant impact on that.