Charts Predict: Oil Will Be Trading Wasteland for 5 Years
The price of oil could stay in a tight range below $50 a barrel for the next five years, after retesting recent lows, Paul Day, deputy head of research from MIG Investments, told CNBC.
"We expect oil to probably trade in a range between $36 to $47, possibly for five years," Day said.
New York light, sweet crude could fall to $36.78 by May 2009, before going "through quite a protracted time like in the early 90s where we didn't really do much," according to Day.
"We will be stuck in a range for a lot longer than people think and it won't be the big story anymore," he added.
(Watch the full Paul Day interview above).
Robin Griffiths, technical strategist from Cazenove Capital, agreed with the relatively weak and steady outlook for oil. (Watch the full Robin Griffiths interview here >>>).
"The price of oil is going to average, going forward from here, a lot lower than people had factored in only a few months ago," Griffiths said.
The typical pattern for bear markets also suggests that oil could rally a quarter to a half of the value of its recent fall, followed by a further fall, he added.
Last week Merrill Lynch predicted the commodity's price could sink to just $25 a barrel next year.
Clive Lambert from FuturesTechs told CNBC that that is "more than possible." (Watch the full Clive Lambert interview here >>>).
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