Economist Dr. Mikhail Melnik Thinks Oil Will Find Traction In Low $60 Range

Speaking to Benzinga earlier Monday, economist and Southern Polytechnic State University Professor Dr. Mikhail Melnik said he believes the market could see some pullback in the price of oil toward the $60 mark in the first quarter of next year, but he thinks that will be it. “After that, the price will likely remain range-bound in the $60s for about a year,” according to Melnik. The price will gradually head higher, Melnik thinks, but probably won't touch the $100 per barrel mark for at least a few years. Melnik explained his belief the current prices are a result of a number of economic factors, including the Fed's monetary policy which caused investors to hedge against inflation and eventually resulted in abnormally-high prices of oil during 2008-2013. According to Melnik, this action stimulated the supply of oil and resulted in a rise in oil production in the U.S. and globally. “Since it takes time for the supply of oil to increase, in 2014 we observe the effects of the high price of oil during 2010-2012,” Melnik said.