Whether or not the price of crude has hit bottom, oil stocks are still likely to appreciate over the next few months, Wolfe Research Managing Director Paul Sankey said Tuesday.
West Texas intermediate crude dropped below $80 a barrel, hitting two-year lows, with some analysts predicting that it could head toward $70 in next year due to oversupply.
"I think there's a good chance it's bottomed," Sankey said. "Certainly, seasonally this is a low, and we think it's a terrible time to capitulate and go negative. We're a month away from an OPEC meeting. We do think the Saudis may be trying to scare the other members of OPEC into making cuts with them, which is why the news flow has been so overwhelmingly bearish."
On CNBC's "Halftime Report," Sankey said that the hit to crude prices could be a boon for oil stocks.