Darren Sinden, Market Commentator for Admiral Markets, joined Nick Batsford on the Tip TV Finance Show to discuss the bearish future for oil.
What next for the global economy?
Sinden noted that the end of October will see greater clarity for market direction following the BoJ and the FOMC meetings. He continued that the obsession with cheap money will continue, and will buy the global economy 3-6 months of upside.
Oil Outlook
Sinden highlighted that October has seen a sharp sell-off in WTI, falling from $51.30 to $44.37 which is a 13.5% drop. He continued that in the medium-term, the oil price could fall to the low $40 levels. He added that the refined product storage facilities are at historically high levels of capacity which suggests downside in the price of oil as seen in both 1998 and 2009. He concluded on the supply side, where he outlined that when OPEC meet in December there is a minimal chance for a cut in production.