Goldman Sachs recently issued a research note that said crude oil could potentially go to $20. While that headline was conveniently extrapolated by the media, Dan Dicker, Senior Energy Analyst at TheStreet, tells Jill Malandrino there are a couple of reasons why oil could move lower, including another blow up in Chinese markets and an imminent interest rate hike in the U.S. which will strengthen the dollar. Commodities are priced in U.S. dollars, so as the greenback moves higher, instruments like oil and gold generally move lower, and the inverse applies due to the strong correlation in the moves. Dicker explains the Goldman Sachs analyst, Jeff Currie, has been 100% right on calling for lower oil when it was trading in the Spring, and while Currie may be a little more bearish than Dicker, his call is right that now is not the time to get constructive on oil, at least until the next quarter or two.
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