Here's Why Battered Oil Could Soon Go From 'Sizzle' Right Back To 'Fizzle'
By Stephanie Landsman
CNBC
CNBC
July 10, 2017
The analyst who accurately called 2015's crude collapse is making a new prediction.
Tom Kloza of the Oil Price Information Service suspects the oil market will heat up this summer. Then, it will do something that could cost traders a lot of money.
"I do think this is a summer of sizzle," Kloza told "Futures Now" recently. "Here in the summer with very, very high usage of gasoline, diesel, jet fuel — you name it. I think it'll prop up crude oil. The problem comes with the fall fizzle."
He argued that demand is rising right now for the commodity, as more consumers spend money on travel and vacations.
But as of Friday's close, it doesn't seem to be reflected in the market. Crude fell by 2.8 percent, closing at $44.23 a barrel. The day's activity was driven by concerns that U.S. output is too high, and OPEC exports are climbing.
Kloza's comments also come just a few days after the AAA, which uses his firm's data, found the average price nationally for unleaded dropped to the lowest level so far this year: $2.23 a gallon.
As the summer progresses, Kloza predicted WTI (West Texas Intermediate) crude oil's range will be between $42 and $50 a barrel, and that will bring prices at the pump higher.
"You have to worry when you get into August and the closer you get to the [fall] equinox. That's when I think you run into real problems with crude," cautioned Kloza. "I'd be a seller when it gets closer to $50 on WTI and maybe $52 on Brent."
By autumn, Kloza forecasts, refineries will run less and more oil will be coming online from the Permian Basin in North America. Those are the catalysts to help push crude prices lower.
While traders may suffer, it could spell relief at the fuel pumps for consumers.
"We think that oil will be lower in the first quarter of 2018 compared to the third quarter of 2017," Kloza added.
The analyst who accurately called 2015's crude collapse is making a new prediction.
Tom Kloza of the Oil Price Information Service suspects the oil market will heat up this summer. Then, it will do something that could cost traders a lot of money.
"I do think this is a summer of sizzle," Kloza told "Futures Now" recently. "Here in the summer with very, very high usage of gasoline, diesel, jet fuel — you name it. I think it'll prop up crude oil. The problem comes with the fall fizzle."
He argued that demand is rising right now for the commodity, as more consumers spend money on travel and vacations.
But as of Friday's close, it doesn't seem to be reflected in the market. Crude fell by 2.8 percent, closing at $44.23 a barrel. The day's activity was driven by concerns that U.S. output is too high, and OPEC exports are climbing.
Kloza's comments also come just a few days after the AAA, which uses his firm's data, found the average price nationally for unleaded dropped to the lowest level so far this year: $2.23 a gallon.
As the summer progresses, Kloza predicted WTI (West Texas Intermediate) crude oil's range will be between $42 and $50 a barrel, and that will bring prices at the pump higher.
"You have to worry when you get into August and the closer you get to the [fall] equinox. That's when I think you run into real problems with crude," cautioned Kloza. "I'd be a seller when it gets closer to $50 on WTI and maybe $52 on Brent."
By autumn, Kloza forecasts, refineries will run less and more oil will be coming online from the Permian Basin in North America. Those are the catalysts to help push crude prices lower.
While traders may suffer, it could spell relief at the fuel pumps for consumers.
"We think that oil will be lower in the first quarter of 2018 compared to the third quarter of 2017," Kloza added.
Article Link To CNBC:
0 Response to "Here's Why Battered Oil Could Soon Go From 'Sizzle' Right Back To 'Fizzle'"
Post a Comment