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. "Here in the summer with very, very high usage of gasoline, diesel, jet fuel. I think it'll prop up crude oil. The problem comes with the fall."
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.
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."
Source: Bloomberg
Trader I. Ivanov
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