Middle East tension may not mean what you think for crude oil

Ahead of next week's OPEC meeting in Vienna, strategists are closely watching swings in crude oil prices, which are faltering after weeks of gains.

Despite political tensions involving oil superpower Saudi Arabia and OPEC's promises to cut production, crudeprices could come down by year-end, one strategist says. Here's why.

• "Tensions in Saudi Arabia are still flaring following the actions by Crown Prince Mohammed bin Salman," Chantico Global CEO Gina Sanchez said Monday on CNBC's "Trading Nation," referring to a vast political shakeup in the kingdom earlier this month that initially boosted oil prices.

• It is unlikely, however, that this will be an "actual geopolitical event," Sanchez said, and oil prices should continue settling.

• Sanchez set her year-end price target for crude oil at $52.60 per barrel, though she is expecting swings in volatility along the way, along with "occasional spikes" as regional tensions build.

• West Texas Intermediate crude oil settled lower on Monday; last week marked the commodity's first week of losses after five-straight weeks of gains, and oil continues trading in the mid-$50 range.

Bottom line: Despite what could be a bullish fundamental backdrop, crude oil may fall by year-end as political tensions simmer down.

Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more