Oil prices fell more than 3% Monday, breaking below $40 a barrel. Now what?
According to one analyst, prices are likely to move lower. Speaking with CNBC, ClipperData’s Matt Smith said he thinks record inventories as well as the U.S. glut will contribute to further downside.
“We’re seeing 1.39 billion barrels [in inventories], that’s 113 million barrels higher than it was this time last year,” he said.
Another factor why Smith sees lower prices? China.
China has been stock piling crude oil and this will likely see prices fall under pressure moving forward, Smith said.
As the Wall Street Journal put it, “Gasoline glut, lower Saudi prices and signs of increased U.S. production accelerate selloff.”
The global gasoline glut, early signs of increased U.S. production and likely higher output from OPEC have pushed oil prices some 20% lower since June and are likely pushing crude into a bear market.
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