Oil prices have fallen significantly in the past few weeks and experts say it is likely to remain under pressure as the commodity remains oversupplied.

Western Texas Intermediate oil was trading at US$74.79 per barrel as of late morning trading on Friday, falling from the $90 high only a month prior.

“It is a sign that the market is oversupplied at the moment,” Andrew Lipow, president of Lipow Oil Associates, told BNN Bloomberg in an interview on Friday.

Lipow pointed to the additional oil from OPEC+ hitting the global market at the same time as oil sanctions against Venezuela were lifted as the main reason why the commodity is currently over-supplied.

“You need to look no further then the price of oil being $74 for WTI, and a bit less than $80 for Brent oil, to come to the conclusion that OPEC+ is going to suspend their production cuts through the first quarter,” he said.

Andrew Pyle, senior investment advisor and portfolio manager at CIBC Wood Gundy, suggested that in addition to the oversupply, the expected slowdown in the U.S. economy could push the demand for crude even lower, and believes prices for WTI futures might reach as low as $70.

“It may be a tougher slog to get prices back up,” he said. “It may get up to $80, but I think getting back up to the highs we saw recently, north of $90, I think is out of the question for now.” 

In this environment, he suggested investors pick oil and gas stocks that have strong balance sheets and excellent cash flows to weather the pressure and persist through heightened interest rates.

“If we’re going to get back into energy, then obviously we’re going to looking for fantastic cash flow, we’re going to be looking for solid balance sheets right now,” he said.

Pyle is anticipating rates to stay higher for longer next year and is looking for large-cap energy stocks that can navigate that risk. 

“Debt is going to matter a lot going into 2024,” he said.