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CME Oil Trader Knippa: Crude May Reach $150

By    |   Tuesday, 01 Apr 2014 03:22 PM

Crude oil has plenty of room to rise amid strong demand from end users and continuing tension in the Mideast, says CME oil trader Tres Knippa.

His target price is $125 to $130 a barrel, and $150 isn't out of the question, Knippa told Yahoo. Furthermore, "if something really big happens in the Middle East, $200 isn't something you can rule out." Knippa didn't specify a time frame.

West Texas Intermediate crude for May delivery settled at $99.74 Tuesday.

One reason for Knippa's bullishness is that spot crude is trading about $2.50 higher than crude for delivery this summer, he said. "That means the end user is saying, 'I don't care if it's going to get cheaper later, I want whatever supply I can get hold of now.' "

As for the Mideast, "there’s been tension in the Middle East since the earth cooled, so I’m kind of counting on that to continue," Knippa said.

To those who say there's a glut of U.S. crude, he asks, "If there's a glut, why are end users paying more for crude now than six months from now? If there's a glut, why are we sitting with global inventories at 2002 levels?"

But not everyone sees it as a slam dunk for oil to soar from these levels. "From a fundamental standpoint, to get above $100, we need a supply disruption or geopolitical risk," Tariq Zahir, an analyst at Tyche Capital Advisors in New York, told Reuters.

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Crude oil has plenty of room to rise amid strong demand from end users and continuing tension in the Mideast, says CME oil trader Tres Knippa.
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2014-22-01
Tuesday, 01 Apr 2014 03:22 PM
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