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.