I suspect that this rally that we are seeing in the last couple of days is a little bit of a foolish rally,” OPIS’ head of energy analysis told CNBC’s “Squawk on the Street.” “And we’ll retest the lows late in February, March, when refineries go to maintenance, so I still think we’re going to test that December 2008 level of $32.40 to $33. I don’t suspect we will get beneath it, but you never know.”
U.S. crude was priced at about $37.99 a barrel in early afternoon trading, up 1.3 percent.
Kloza said it’s going to be a long time before crude oil truly recovers.
“I think there is hope for the bulls, but I think to be bullish, you have to be looking for maybe a price of $50 or more, and it would be late in 2016,” he said. “Otherwise you need something geopolitically, and beyond ISIS, something that threatens oil fields or some of the oil production. … So it’s going to be a long slog before crude oil really recovers.”
Kloza also said the U.S. is facing an “interesting divergence” when it comes to gasoline prices. Kloza said gasoline prices are high in relation to the low price of crude, resulting in high margins for refiners.
“I wouldn’t be surprised to see anywhere from $1.50 to $1.90 sort of east of California in various states, even tumbling below $1.50 briefly,” Kloza said. “California can see prices go back above $3, so they really are an exception.”
[“source -cncb”]