Anyone hoping the recovery in oil prices is here to stay could be in for a rude awakening, as prices could fall below $50 a barrel on a glut of supply, a commodities expert warned on Monday.
U.S. West Texas Intermediate (WTI) and Brent crude oil hit six-year lows in January, but have recovered somewhat on the back of a decline in U.S. rig counts and geopolitical tensions in the Middle East, which have taken supply out of the market.
Eugen Weinberg, head of Commodity Research at Commerzbank, told CNBC Monday that while he wouldn't rule out further price rises, the rally in oil prices was "premature." He added that the price of U.S. crude could fall below $50 should the rally stall.
"I wouldn't be surprised if we saw the current $59 go even below $50, should this rally stall and should we come to this correction," Weinberg told CNBC on Monday.
"I think it's more hopes driving the market rather than the real facts. I wouldn't be surprised to see a short-term correction, a strong correction because of all the fundamental data," he said, adding "I think the rally is premature and would be probably looking for the prices (to go more) below $60 in a month's time than above $70, for Brent."