Crude oil may see further pain ahead after logging a five-week losing streak and tracking for its worst first-half percentage fall since the late 1990s, according to a Reuters estimate.
The price of oil has fallen as concerns over a global supply glut have yet to subside, and OPEC-led production cuts have had relatively little impact. Phil Streible, RJO Futures senior market strategist, expects the sell-off to continue in the short term.
“That oil inventory total that we have is 26 percent above the five-year average. So, quite a bit of oil out there; I would also expect gasoline stocks to rise” in the coming sessions, Streible said Friday on CNBC’s “Trading Nation.”
“The drawdown we’ll expect is just right around 1 million barrels for crude oil, so data coming out of course is going to be quite bearish for oil going forward,” he said. His target is closer to the $40 area, roughly 7 percent lower from oil’s settle on Friday.
U.S. benchmark West Texas Intermediate was slightly up Monday, trading at $43.14 a barrel.
Strategist Max Wolff said Friday that oil has reached a bottom even though inventory levels remain high. This is due in part, he said, to growing unrest in some oil-rich regions.
“We don’t think we’re going to go below the low 40s. We think we’ll probably catch a bid a few weeks out from there. So in the longer term perspective, we do think we’re pretty much near the bottom,” the 55 Institutional strategist said.
The commodity has fallen nearly 20 percent year to date, the biggest first-half slide in 20 years, according to Reuters. The energy sector, to which the price of crude oil is closely tethered, just logged its worst weekly performance in nine months.
Source: Investment Cnbc
Beaten-down crude oil is tracking for a huge losing streak