There seems to be no end to how low crude oil can go. The precious metal fell another 1.5 percent on Thursday, settling at $48.48, the lowest level since March 31. Many analysts are expecting it to drop even more in the months ahead.
"This market is headed to $40 before we go to $60 again," said Bill Baruch, chief market strategist at Chicago-based iiTrader. He attributes the low price to the glut in the amount of oil throughout the Middle East and Asia and the local supply of shale that has been stockpiling in the U.S. these past few years.
With the deal in place in Iran, the country could start exporting the large amounts it has stored over the last decade when an embargo was clamped down. It can also reopen closed oil mining facilities that were closed down during the same time.
And according to the U.S. Energy Information Administration, commercial crude-oil stockpiles in the U.S. have increased by 2.5 million barrels to 463.9 million barrels.
Some Still Bullish
Some traders are still bullish, however, saying that these prices are unsustainable. According to Steven Kopits of Princeton Energy Advisors, "The only way you could keep oil prices at current levels is if U.S. shale producers can demonstrate growth in quantity at current prices, and I just don't believe that's true right now."
Kopits believes that “There could be "more of a downdraft" in the near term. …. I see WTI north of $60 soon, and possibly north of $65."
