Buy oil on dips, fair value of WTI crude is in the mid-U.S. 80s: energy strategiest
Oil entered a bear market last week and while prices have climbed since then, the commodity remains under pressure. As of late morning trading on Monday, crude oil traded at US$77.80 per barrel.
As oil prices fell, it triggered a lot of selling, but there seems to be a big disconnect between the physical market and the financial market, Michael Tran, managing director at RBC Capital Markets, told BNN Bloomberg in an interview on Monday.
“We do think that oil prices have over shot to the down side,” Tran said. “We do think that oil dips are buying opportunities.”
He is predicting Western Texas Intermediate (WTI) oil prices to hover around the mid $80 range.
“Generally, $85, plus or minus three, four, five dollars in either direction is probably fair game,” Tran said.
He anticipates the commodity will continue to be volatile in the coming weeks as several events will weigh on the outlook, including this week’s OPEC+ meeting, American Thanksgiving on Thursday and the coming winter holidays.
“I think the chop in oil prices is here for the next several of weeks,” Tran said.