Oil Prices Will Have A 'OMG-Shaped' Recovery, Says Clearview Energy Partners

After declining to 6-year lows last week, oil prices again opened weak on Monday and continued to trade below the $43/ barrel mark. Kevin Brook, Clearview Energy Partners, was on CNBC recently to discuss how farther can oil prices fall.

OMG-Shaped Recovery

"Oil continues to collapse out from underneath us, particularly in Asia," Brook began. "But just generally there's also the ongoing supply story at the same time. So, if you are in the oil alphabet game, I think, you have heard the sort of the U-shaped and the V-shaped and the W-shaped. This one is the OMG-shaped recovery in oil prices because I think we have got a little further to fall."

More Room To The Downside

Brook was asked till what level oil prices will fall and at what price U.S. oil production will start to decline. He replied, "Well, I'll try to answer the first question and I don't think anyone can answer the second question. The first question is really driven by two things. There's the oil clock and the oil calendar. Right now we are going through the seasonality of oil and coming into a weak period as refineries turnaround for maintenance. That's where you are going to see more room to the downside, especially on the WTI side, the WTI Brent spread which you can see widening."

"And now to your second question. Look in North Dakota everyone thought they'd be shutting down $25-$30 ago, they are still going strong. And the Department of Mineral Resources up in North Dakota says that the core counties can still produce at $24 to $28 per barrel. I am not so sure that that's far away because up in North Dakota they are already there," Brook concluded.