Anyone hoping the recovery in oil prices is here to stay could be in for a rude awakening, as prices could fall below $50 a barrel on a glut of supply, a commodities expert warned on Monday.
U.S. West Texas Intermediate (WTI) and Brent crude oil hit six-year lows in January, but have recovered somewhat on the back of a decline in U.S. rig counts and geopolitical tensions in the Middle East, which has taken supply out of the market.
Eugen Weinberg, head of Commodity Research at Commerzbank, told CNBC Monday that while he wouldn’t rule out further price rises, the rally in oil prices was “premature.” He added that the price of U.S. crude could fall below $50 should the rally stall.
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