Sorry, But The Oil Rout Isn’t Over Yet: Analyst

on February 03, 2015 at 3:30 PM

Markets Surge Into Positive Gains For Year

Despite the 15 percent jump in oil since Thursday, U.S. crude is not in for a sharp bounce upward, Stewart Glickman of S&P Capital IQ told CNBC on Tuesday.

The energy equity analyst noted in a “Squawk on the Street” interview that the forecast from S&P Capital IQ sister company Bentek Energy for 2015 puts the average price of West Texas Intermediate at $51 per barrel.

“We’re basically sitting on that today, so I think people may have a hope, that in 2009 we had this really, really strong v-shaped recovery, so why can’t we have that now?” he said.

“I think they’re buying up oil on the basis that it’s going to be a quick crisis, the equivalent of the 24-hour flu, and I don’t think it’s going to be like that this time.”

Glickman said the picture is largely negative to neutral across oil industry segments, with the only exception being players in the midstream, which includes oil transportation and storage companies.

S&P Capital IQ has a “strong buy” on exploration and production firm EOG Resources. “It’s a pure play E&P, but in our opinion, best of breed in the industry with some of the best cost metrics around and [it is] one of the earliest movers into the U.S. shale.”

While shale producers’ prolific growth and the subsequent increase in supplies accounts for falling oil prices, EOG performs better than most of its peers, he said.

Read the remainder of this article on CNBC’s website…