For the first time since October, last week Brent and WTI crude futures reached $50 a barrel. But in spite of the shift upwards, analysts still disagree over where the price of “black gold” is heading.
Oil prices have rallied over the last two months due to unplanned production outages in Canada and Nigeria that have helped bring global supply and demand into better balance. Crude prices have declined since Thursday’s peak but remained above $49 per barrel on Tuesday morning.
Christian Gattiker-Ericsson, the chief strategist and global head of research at Julius Baer bank, said the likely next step for oil prices was back downwards.
“The new normal for oil is somewhere between $35 and $50. So depending on global activity, we will probably revisit the lower end at some stage,” he told CNBC in a television interview on Monday.
“For now it is pretty much holding up, but I think we are at the up-end of this range and we expect much more of a range-bound market. There is so much supply that will take the global economy two or three years or so to absorb,” he added.