You are here

Oil price seen by Schork at US$40 a barrel unless price stabilizes

[LONDON] Oil prices are at risk of sliding to US$40 a barrel or lower if they fail to stabilize at current levels, according to Stephen Schork, a consultant who's worked in commodities trading for more than 25 years.

"If the market doesn't find support here, it clears a path to US$40 and below," the president of Schork Group Inc said in an interview with Bloomberg Radio broadcast on Monday.

"The bottom line is we have too much supply, not enough demand."

West Texas Intermediate, the US benchmark, slumped to a six-year low of US$43.57 a barrel amid speculation that the country's supplies may strain available storage. Breaking through the previous low reached in late January shows there's little to prevent crude from plunging further, said Mr Schork, whose company is based in Villanova, Pennsylvania.

The oversupply, coupled with strength in the US dollar, mean prices are headed lower, said Mr Schork, whose clients include speculators and oil consumers.