Oil prices rose above $72 a barrel on Wednesday for the first time this month as a falling dollar spurred investors to buy commodities as a hedge against inflation. Paul Sankey, oil analyst at Deutsche Bank told investors where they should be looking and shared his outlook for crude oil in the months to come.
“We’re looking for $55 a barrel on average next year, which is a long way below where we are at right now,” Sankey told CNBC. (Read below for his full stock recommendations...)
In the meantime, Sankey said he is “very bullish” on the dollar into 2010.
“That’s crucial because the additional element beyond the fundamentals is how you see the dollar performing over the next 6 months,” he said. “Without that dollar strengthening, we won’t get oil where we think it’s going, but we’re bulls on the dollar. To play it, we like companies with low costs, strong balance sheets.”
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“Outright negative” on oil refiners.
Analyst’s firm owns and has investment banking clients who own shares of OXY and XOM.