West Texas Intermediate crude futures sank another 5.1% to close at $40.91 per barrel, a move that has the benchmark U.S. crude contract trading at its lowest levels in six and a half years.
Oil experts project crude prices will continue to dip to levels where many shale producers will be unable to generate a profit, reports Patti Domm for CNBC.
According to a recent CNBC oil survey, the majority of investors and analysts believe WTI will slide to between $30 and $40 per barrel this fall, with about 62% of respondents anticipating the WTI crude to trade between the range and stay low toward the end of the year,
Additionally, 43% of respondents believe the breakeven price for the U.S. shale industry is about $45 to $55 per barrel, and 24% estimate the breakeven level at $55 to $65.
However, as has been the case throughout oil’s long spiral downward, there are signs that some traders insist on being bullish and the latest comes courtesy of the options pit where some traders are betting upside for the downtrodden United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures. [Problems Mount for Oil ETFs]