The bear case for crude ahead of OPEC

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.

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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

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