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Those anticipating a recovery in oil prices after the recent bludgeoning are likely to be disappointed. According to a senior analyst, prices are likely to sink further from the 12-year trough reached this week.

"It certainly isn't (the bottom for oil)," said John Kingston, President and Director of Global Market Insights at McGraw Hill Financial Global Market Insights.

Clues for the future direction of oil prices could be gleaned from futures contracts. While front-month March WTI and European Brent crude contracts are around $28 a barrel--the WTI contract had slumped to as low as $26.19 on Wednesday, the lowest level since May 2003--but the sharp decline in the prices of front-month benchmark contracts over the last 19 months has caused oil contracts to go into contango.

Contango refers to a market phenomenon in which the front-month or near-term futures contracts are trading less than or at a discount to longer-dated futures contracts. This indicates ample supply for the immediate future.

Noting that the spread between the front and forward months has widened, Kingston said this points to more pain ahead but "at a certain point it gets so wide that maybe you've reached the bottom."

Benchmark crude oil futures prices have fallen 70 percent since the summer of 2014 due to an energy supply surplus and as OPEC stands back from cutting its 30-million-barrel-a-day production ceiling.

OPEC kingpin Saudi Arabia has been holding out on cutting production as it sticks to its strategy of squeezing out higher cost energy producers, such as shale companies, out of the market.

Kingston said U.S. production is down but the rate of decline has slowed.

Despite the bearish bear market, OPEC is unlikely to call for an emergency meeting, said Kingston.

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"If it hasn't happened by now, it's not going to happen. The people who are calling for a meeting are the same ones who call for a meeting all the time. It's not going to happen."

With prices on an extended decline, ever increasing lower crude oil forecasts have been put forth, with Standard Chartered forecasting oil prices at $10 a barrel.

Some oil grades are already trading far below $28 a barrel.

On the physical market, Koch Brothers' Flint Hills Resources offered to pay just $1.50 for North Dakota Sour, a low quality grade of crude last Friday, Bloomberg reported, underscoring dire oil market conditions in the U.S.

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