Fears of slowing oil demand, a global crude glut and Middle East woes spooked the market at the beginning of the year, but now, a change of heart could guide oil to $50, according to an RBC Capital Markets strategist.
"[The] market's psychology has changed," Helima Croft, RBC Capital Market's head of global commodities strategies, told CNBC's "Power Lunch" on Monday. "Everyone is thinking about now the recovery to $50," she said, adding that OPEC's freeze talk has influenced market sentiment.
International benchmark Brent went just slightly above $41 a barrel in intraday trading Monday before settling at $40.84, up more than 5 percent; West Texas Intermediate also rose more than 5 percent to settle at $37.90 on the day.
While $40 oil seemed farfetched to some just a month ago the case for $50 oil has been gaining momentum. A few weeks ago, Mike Wittner, head of U.S. commodities research at Societe Generale, told CNBC's "Closing Bell" that fundamentals support $40 oil, and that by year-end the market will see $50 oil.
The psychology behind the current boost in oil prices, according to Croft, is that OPEC producers have realized they need $50 oil, and are worried that lower oil prices would elicit further credit ratings downgrades and expedite austerity measures.