Sluggish demand and bountiful supply has pushed oil prices down 55 percent since last June, and many experts think the trend will continue.
But not Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. "I think we are in the process of creating a floor," he told CNBC
. "I don't think we're going to see new lows here."
Already U.S. crude has rebounded 15 percent, to $48.46 a barrel Friday afternoon, from its six-year low of $42.03 March 18.
Employing technical analysis, Wolfberg noted that oil has formed a double bottom around $44.
If crude can break above $52, it can easily jump another 10 to 20 percent, he said.
A move through $52 to $54 means "$60 is going to be the next level in the cards," Wolfberg said.
On the fundamental side, U.S. supply is set to decline, he said. And military unrest in the Mideast may cause a disruption in output there.
"We are almost through refinery maintenance. once that's behind us we're going to see these inventories go down. We've seen the rig count come down significantly," he stated.
"I'm tempted to say we've seen the bottom, but you could see one more flush. But either way, I don't think we're going to new lows."
Meanwhile, we can thank Saudi Arabia for much of the oil price plunge, according to Richard Fisher, president of the Dallas Federal Reserve. "The Saudis have engineered" the move, he said in a speech last month, CNNMoney
Saudi Arabia led OPEC to reject production cuts, and the nation has offered price reductions to its customers. Presumably the Saudis are trying to drive high-cost suppliers, such as U.S. shale oil producers out of business.
"We are a huge supplier of energy. The Saudis took a while to realize what was going on," Fisher said, referring to the growth of U.S. output.
Low oil prices also cause pain for Iran, Saudi Arabia's hated neighbor, he noted.
Given Saudi Arabia's policy, Fisher doesn't expect oil prices to rebound back to $100 anytime soon. "From a budget stand point, [the Saudis] have reserves that can handle this," he stated.
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