Tags: Dicker | oil | 140 | WTI

MercBloc's Dicker: Oil 'On Its Way to $140' a Barrel

By    |   Wednesday, 01 October 2014 06:59 PM

U.S. oil prices fell to a 17-month low Wednesday after Saudi Arabia announced price cuts, with November futures on West Texas Intermediate crude, the U.S. benchmark, settling at $90.73 on the New York Mercantile Exchange.

Many experts expect prices to fall further still amid sluggish demand and bulging supply. But Dan Dicker, president of money manager MercBloc and author of "Oil's Endless Bid," isn't one of them.

"If you put up any chart for any currency you like against the dollar, . . . you see a ski slope. And that's really what's been affecting oil," Dicker told CNBC.

"That, to me, is a financial connection that is specious at best. . . . The dollar continues to get stronger and continues to force oil lower. But this is a mirage, and this is why: it's all about future production."

Dicker sees plenty of constraints on output. That includes sanctions against Russia, violence in Iraq, turmoil in Libya and a possible Ebola outbreak in Nigeria.

Lower-than-expected production "is going to translate into a much higher price for oil," he said. "Over the course of the next two years, I see oil going to at least $125 on its way to $140."

Others see things a bit differently.

"The Saudi price cut is a sign that they won’t be cutting back production further and may be setting up for a market share battle," John Kilduff, a partner at Again Capital hedge fund, told Bloomberg.

"One bullish inventory report isn’t going to be enough to support the market when the Saudis are taking these actions."

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U.S. crude oil prices fell to a 17-month low Wednesday at $90.73, but Dan Dicker, president of money manager MercBloc and author of "Oil's Endless Bid," expects a big rebound over the next two years.
Dicker, oil, 140, WTI
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2014-59-01
Wednesday, 01 October 2014 06:59 PM
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