Tags: Oil | Crude | price | Drop

Oil Analyst Brodrick: Crude Could Drop to $64.50

By    |   Tuesday, 23 Aug 2011 08:54 AM

Oil prices already have plunged 27 percent from their April/May high of $114 per barrel, with Benchmark West Texas Intermediate crude for October delivery recently trading at $83. But many experts say the drop has further to go, with one expert saying it could plunge to $64.50.

A CNBC survey shows that 11 of 12 analysts expect a fifth straight week of lower oil prices.

“Every bounce right now will be seen as a selling opportunity,” says Linda Rafield, senior oil analyst at research firm Platts.

“Sentiment remains overwhelmingly bearish. I would not be surprised to see another test of the $75 per barrel level for Nymex crude. You need a sign that there is exhaustion selling before jumping back onto the long side, and we haven’t seen that yet.”

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(Getty Images photo)
Sean Brodrick, a natural resources analyst at Weiss Research, tells CNBC prices may descend even further. Now that technical support $84 a barrel support has given way, the market will likely test $71 and potentially $64.50, he says.

To be sure, the oil price drop so far has benefited traders shorting the commodity more than consumers filling up their gas tanks. While crude price have plummeted 27 percent since early May, gasoline price have dipped only 9 percent.

“Typically, the retailer [gas station] will raise prices in front of rising crude and be more reluctant to lower prices” when it falls, Sander Cohan, principal at energy consulting firm ESAI, tells The Wall Street Journal.

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Oil prices already have plunged 27 percent from their April/May high of $114 per barrel, with Benchmark West Texas Intermediate crude for October delivery recently trading at $83. But many experts say the drop has further to go, with one expert saying it could plunge to...
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Tuesday, 23 Aug 2011 08:54 AM
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