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Don't count out oil in the $20s: Analyst

Oil could still possibly tumble further, said Nasdaq energy analyst Tamar Essner on Friday.

"I think it would be risky to rule out a $20 handle on oil right now," she told CNBC's "Squawk on the Street." "There are too many bearish factors and the market is very nervous."

Among those downbeat factors include a stronger dollar, especially if the Federal Reserve raises interest rates next week, Essner said.

"Sanctions on Iranian crude could come offline as early as January, and OPEC messaged to the market last week that they are going to continue pumping at record levels because they want to focus on market share over price, at least in the next six months," she added.

Essner said that the current down cycle in oil is driven by supply, and "supply is what has to get us out of it." She doesn't expect to see oversupply come into balance until 2017, despite the massive cutbacks in capital spending from energy companies.

"That's going to have to happen. The supply-demand rebalancing process does take a while, and I don't think we see that until 2017," she said.

Bill Baruch, chief market strategist at iiTrader, said production in the U.S. and the Americas will start to feel pressured as a result of oil below the $40 level.

"That's going to start to bring some support in, but the thing to remember is the bottom is not a price, it is a process. Look at this level as being the process it has started," he said in an interview on "Fast Money: Halftime Report" Friday.