Oil's been flirting with prices below the $30 range recently, raising questions about a possible bottom, but is this just the beginning of a wild ride?
Oil's in for a long slog; conditions will get "incredibly ugly" for fundamentals in the next 90 days, Tom Kloza, Oil Price Information Services' global head of energy analysis, said to "Closing Bell" on Thursday.
"Too much oil is coming to [the] market, refineries are just starting to get into the middle innings of their maintenance season — and that means less demand," Kloza explained.
While an oversupplied market and refinery maintenance season is no news for market watchers, the impending doom doesn't end there. The consumer's upside of low oil prices, gasoline, is about to take a hit, according to Kloza. The OPIS founder forecasts that gasoline prices are pumping up this spring.
"We are going to pay more at the pump because refineries are going to be processing less crude, and there's a glut of crude oil," he said, adding that "very shallow inventories across North America don't allow for a glut of gasoline."
This apparently won't last forever, as the expert forecasts a better second half of the year with "plenty" of gasoline.
Reports surfaced on Thursday that Saudi Arabia and Russia were in dialogue to reduce production, while the news sparked a rally in oil prices, an OPEC delegate denied the claims. The delegate did mention, however, that the kingdom is willing to cooperate.
To this, Kloza said: "Nothing happened today. You have Russia saying that they want to have a dialogue with some OPEC countries, which one would expect them to say."
All in all, the winners here are refiners, the expert said.
"I do like refiners over the next five months because I think gasoline is going to stream higher in the spring," he said.