Crude oilis tumbling once again today, finally breaking below the psychologically important $55 dollar a barrel mark. Oil's abrupt decline this year, has left Wall Street wondering if the great energy run is over - at least for now. Nonetheless, there are still some investors who remain quite bullish on oil. Today on “Squawk on the Street,” we spoke with one of them to find out why.
Jerry Castellini, President and Chief Investment Officer at CastleArk Management believes oil is going to stick at its current level. “Most people who look at technical (trends) would tell you, you need some pretty powerful negatives to drive the price much lower.”
Castellini doesn’t think warm weather in the Northeast will drag down prices much more, either. “We’re going to get some kind of cold finally. It’s hard to continue to forecast 10 to 15 degree temperatures (above normal) but more significantly, look at the natural gas price which has actually bottomed and is rising now. It’s inconsistent to attach bad weather to a commodity when it’s sister commodity, natural gas, is rising."
Castellini also doesn’t believe that supply will catch up with demand in the short term. “People don’t appreciate how long it takes. It isn’t just a one year or two year phenomenon. You need to find it, and get it to market. And that takes 5-10 years to do that...we just have not gotten close to the time, where you’re going to see new oil."