On September 2, WTI crude oil settled at $46.25 per barrel. On Friday, WTI settled at $46.59. And in between, crude oil settled as low as $43.20 and as high as $49.63. Now what?
While some might see crude oil falling into a manhole to $30 or less, I think market sentiment may be starting to change, and around the corner is a slow ramp upwards to $55 by January 2017. But like the last two months, the path may be more akin to a rollercoaster.
How bad can it get? There is plenty of bearish news out there. Crude oil inventories are rising in the U.S., having reached 480 million barrels last week and I expect more builds as we progress through the spring refinery maintenance season in the first quarter of 2016. I think that crude oil inventories will surpass 500 million barrels and the market simply will not like that headline.