Crude oil has been trading within a tight range over the past quarter as demand has not been strong enough to meet the supply glut, but it could see $70 sometime in July. James Cordier of OptionSellers.com tells The Street’s Jill Malandrino that there is a small window coming up in the next four to eight weeks in the U.S. where crude supplies will finally start to come down significantly. Cordier believes crude inventory in July and August will see drawdowns to the tune of $4-$8 million barrels per week, which is fundamentally bullish for crude. Crude inventories have seen drawdowns over the past seven weeks, and Cordier says the refined products should be the next to see supply moving lower. Crude will see more drawdowns over the next two to four weeks and gasoline will see the same by the end of August. Cordier explains that the environment is interesting right now because there was the expectation that OPEC would lay off producing so markets could get up to more profitable levels, but that has not been the case, which is keeping crude under pressure. That said, Cordier thinks that supply will come off enough over the next few weeks in the U.S., propelling crude oil to the mid $60-$70 level.
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