Crude oil has 'nowhere to go from here but down,' says market watcher

Crude just posted its best start to a year since 2006, but some traders say the run is unsustainable.

"I'm bearish on crude oil. The production is up over 10 million barrels. That's the highest level since 1970," Phil Streible, senior market strategist at RJO Futures, said Thursday on CNBC's "Trading Nation."

Noting that the most recent federal data showed that U.S. crude production broke 10 million barrels per day in November for the first time since 1970, Streible pointed to crude's significant long position among speculators.

"You've got the net speculative long positions at its highest level since 2006; I think it's got nowhere to go from here but down," he said.

Crude prices have surged 9 percent this year, making January the fifth-straight month of gains. The rally has boosted energy stocks: The XLE energy ETF has rallied nearly 5 percent in January.

The group appears overbought at this juncture, said Matt Maley, equity strategist with Miller Tabak.

"That $78 level … that's key resistance. That's its high from 2016, and its high from last week. If, on its next rally, it can break above that level in any significant way, that's going to be very bullish for the group," Maley said Thursday on "Trading Nation."

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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.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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