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Page added on August 2, 2015
Oil to hit low $30s by the end of 2015
The prospect of oil prices falling below $40 receded earlier this year amid a crude rally, but with futures sliding again, investors shouldn’t rule out a three-handle, Again Capital founding partner John Kilduff said Thursday.
“Christmas time we’ll probably be rebounding off new lows off of the mid to low 30s,” he told CNBC’s “Squawk Box.” “We have a lot to go. We’re going to take out the March lows of $43 and trade down to the 30s in my view.”
U.S. crude was trading around $49 Thursday morning. The benchmark touched a four-month low this week.
A growing global glut of diesel fuel could be the next catalyst, he said, noting that Saudi Arabia and China have ramped up their refining capacity and are now flooding the Asian market with diesel.
“You hear analysts come on all the time talking about this golden era for refiners,” he said. “You’re still making 30 bucks a barrel turning crude into gasoline here, and so there’s been a rush into it, and now it’s going to see the tipping point just the way crude hit a tipping point last year.”
Recent developments in China and Iran may also contribute to another leg down in oil prices, Kilduff said.
“I’ve been hearing a lot about how this Chinese stock market crash doesn’t affect anything and doesn’t count almost. For me, it’s going to affect consumer confidence there,” he said.
“If we see things like … automobile sales coming down, that hurts the outlook for oil demand growth and gasoline demand growth going forward.”
Meanwhile, China is beginning to buy up Iranian oil currently being stored in floating tankers, Kilduff said.
Analysts believe Iran may have as much as 40 million barrels of oil sitting offshore. That crude could soon flood the market if world powers lift sanctions on the country following the deal over Iran’s nuclear program.
5 Comments on "Oil to hit low $30s by the end of 2015"
Makati1 on Sun, 2nd Aug 2015 8:30 am
$25 by Christmas? Bummer for the holidays if you own oil stock …
And then there is the New Year, 2016, when the political bullshit will be flung all over the place as the assorted clowns promise a unicorn in every back yard and an eternal rainbow over every city, with huge pots of gold at both ends. What depression? What wars? What drought? They won’t exist in the political year of 2016.
Step right up folks! The Greatest Show on Earth is about to begin! Billions spent for your amusement. Clowns performing in every ring. Elephants and Jackasses and all sorts of strange hybrids, ALL performing for your amusement.
Cost of admission:
Only your freedom and future.
Davy on Sun, 2nd Aug 2015 8:39 am
25$ by christmas Mak? Bummer for your superhero Russia. Stay tuned to the Mak show.
Jimmy on Sun, 2nd Aug 2015 9:12 am
I love it when the same assholes who never saw it coming in the first place now tell us low and long it’s gonna be.
Davy on Sun, 2nd Aug 2015 9:22 am
Amen to that Jimmy!
Nony on Sun, 2nd Aug 2015 4:16 pm
Takling head BS to fill air time. The futures spread shows CLF6 (JAN16) contract at ~$49. IOW, pretty close to current price and a couple bucks higher actually. That doesn’t guarantee it will happened, but it is the betting money. This talking head sounded like he was just throwing words out there…ooh China. Ooh diesel.
And I wonder if the diesel glut is more related to high volumes of refining for gasoline, with diesel as the corresponding product for the higher part of the distillation curve. Rather than low diesel demand, per se. IOW, we have high gasoline demand, especially in the US and refiners running at very high capacity…and then the diesel doesn’t have as much market but is produced just because you sort of have to produce the whole distillation curve. Of course this is the opposite of what the anti LTO “camel piss” complainers have described. They said we would not have enough diesel, vice too much.