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Buy Crude Now That It's Back Above $50?

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Crude oil is again trading above $50 on back of the recent airstrikes by Saudi Arabia on Yemen. So, should investors be buying this breakout?

Darren Wolfberg from BNP Paribas was on CNBC Thursday to answer that question.

Have We Created A Floor?

"I think we are in the process of creating that floor," Wolfberg said. "We are in this range right now, $44 - $54. I think if we get through $54 to the upside, I think $60 is going to be the next level on the cards, but we are almost through refinery maintenance."

Related Link: Dennis Gartman: Crude Oil Has Bottomed, But Has The Dollar Topped?

He continued, "Once that's behind us, we are going to start to see these inventories go down. You have seen the rig count come down significantly.

"So, right now I am tempted to say that we have seen the bottom, but you could see one more flush. But either way, I don't think we are going to new lows."

Levels To Watch

Wolfberg was asked what are the levels that he is keenly watching on crude. He replied, "We are looking at the recent uptrend over the last few days, kind of that $48 - $50 levels, is an important level for us. We break through there, that would probably open up the bottom of the range, the $44 level. That said, again if we get through $52 and we get through $54, I think $60 is the next point.

"So, really we are watching those levels closely. Depending on how we trade, we are going to be adding positions or changing positions accordingly," Wolfberg concluded.

Shares of United States Oil Fund LP (ETF) (NYSE: USO) traded recently at $18.17, up 4.6 percent.

 

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