Oil prices will remain stuck in a range near $50 a barrel unless one of two global hotspots delivers an October surprise to the market, jolting the cost of crude higher, according to Helima Croft, global head of commodity strategy at RBC Capital Markets.
The first potential shock Croft and her team at RBC are monitoring is a debt default by Venezuelan oil giant Petroleos de Venezuela SA. Oil production from the state-owned PDVSA has steadily slipped as the country grapples with a financial crisis after the collapse in crude prices in 2014 and years of economic mismanagement.
"They have $3.5 billion in national oil company debt coming due in October-November. If they default, that could be significant for Venezuela's production outlook," Croft told CNBC's "Squawk on the Street" on Tuesday.
Lower crude production from Venezuela would tend to support the oil market, which has been oversupplied for years.
The second surprise would come if the United States abandons an international deal that lifted sanctions on Iran. President Donald Trump could refuse to certify that Iran is complying with an accord that puts limits on its nuclear program. That could lead to the renewal of sanctions, which could impact Iran's oil production.
John Kilduff, founding partner at energy hedge fund Again Capital, said these geopolitical concerns may be somewhat overstated. He noted that the five other nations that negotiated the Iran nuclear deal would probably break with the U.S. and refuse to snap sanctions back on Iran.
He also noted that Venezuela is indebted to Russia and China. Russian oil giant Rosneft has amassed a large stake in PDVSA's U.S.-based refiner Citgo by bankrolling Venezuela. China has long lent Venezuela money in exchange for oil.
However, Rosneft has recently suggested it is done lending to PDVSA, which has less than $10 billion left in reserves, according to Croft.
"The math simply does not work on PDVSA staying solvent" without help from Russia and China, she said. "So we think this default is a clear and present danger."