Why the ‘next leg in the oil bull market’ is coming soon

Oil prices may soon head upward, breaking out of the tight range in which they’ve traded lately, a top energy analyst said Monday.

Speaking at the S&P Platts London Oil & Energy Forum on Monday, PIRA Energy’s Gary Ross said the bull market for oil is about to return, potentially sending prices as high as $60 a barrel in the coming weeks.

“We think the markets have consolidated enough and that the next, smaller leg in the bull market is about to occur,” said Ross. “We are actually quite [upbeat] on prices, particularly when the April contract becomes the front-runner later this week.” (The “front-runner” is the nearest tradable contract.)

Ross expects a big drawdown in U.S. inventories as the production cuts from the Organization of the Petroleum Exporting Countries start to be felt in the market. He also noted that so-called “pipeline fill,” the oil you need in pipelines to allow the facility to operate, is likely to reduce supply at the Cushing, Okla., storage and trading hub as spring nears.

Ross is frequently bullish on oil prices. In 2015, for example, he forecast that oil could jump to $75 in 2016. Prices did almost exactly the opposite, hitting multiyear lows in February 2016, before ending the year on a more upbeat note following OPEC’s output deal.

At the forum in London, however, Ross’s relatively upbeat projection was backed by S&P Platts. In his introductory comments, Dave Ernsberger, global head of energy pricing at Platts, said Platts Analytics projected Brent could rise to $65-$70 a barrel by December this year.

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