On Thursday, OPEC members and other oil producers are set to convene in Vienna to discuss curbing global oil production.
Despite some expectations that Russia will agree to extend production cuts, crude oil prices settled lower on Wednesday, just above $57 per barrel, and were little changed in the evening.
Bill Baruch, president of Blue Line Futures, sees the commodity heading lower still. Here are his reasons.
• Long positions have piled into the market ahead of Thursday's meetings, he said, and the positioning has become too extreme. This is creating a so-called "buy the rumor, sell the fact" event, he said.
• OPEC will need its strictest policy yet to attract new buyers, and a lack of firm verbiage on the matter will raise doubts that a six- to nine-month extension of production cuts will hold true.
•His previous upside target of $58.97 was already achieved; oil touched that level late last week.
• A move down to $55 per barrel, or about 4 percent lower than levels on Wednesday evening, is likely in the very near term.
Bottom line: Despite expectations that production cut agreements will be reached in a meeting of oil producers on Thursday, one strategist sees oil headed lower still.
