Tags: Stobler | oil | prices | mid-70s

Financial Adviser Stobler: Oil Prices Could Drop to Mid-$70s

By    |   Tuesday, 14 October 2014 07:44 PM

U.S. crude oil prices have dropped to a two-year low amid bulging supply and stagnant demand. And many market participants say the drop still has legs.

November crude futures sank $3.90, or 4.6%, to settle at $81.84 a barrel on the New York Mercantile Exchange Tuesday.

The price could drop to the mid-$70s within the next few months, Dan Stobler, a managing director at financial advisory firm HighTower Bellevue, told CNBC.

Global demand is being weighed down by sluggish world economic growth. While the U.S. economy expanded at an annual rate of 4.6 percent in the second quarter, the eurozone registered zero growth, and Japan's economy shrank at a 7.1 percent rate. 

Meanwhile, supply has grown. U.S. crude oil production has surged to the highest level since 1986 amid the shale revolution.

"You're looking at a lot of supply in a world that has a flat demand story," Richard Hastings, macro strategist at Global Hunter Securities, told CNBC.

The International Energy Agency forecast Tuesday that global oil demand will climb this year at the slowest rate since 2009. That represents the fourth straight month in which the IEA has lowered its estimate. 

"Demand growth is far underperforming supply growth, and the market is adjusting to a new price level," Greg Sharenow, a commodity fund manager at Pimco, told Bloomberg. "The International Energy Agency report added to the negative sentiment. I can see continued weakness."

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U.S. crude oil prices have dropped to a two-year low amid bulging supply and stagnant demand. And prices could drop to the mid-$70s within the next few months, Dan Stobler, a managing director at financial advisory firm HighTower Bellevue, told CNBC.
Stobler, oil, prices, mid-70s
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2014-44-14
Tuesday, 14 October 2014 07:44 PM
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