Will China Push Oil to the $30s or Venezuela Send Prices into Orbit?

Analysts predict China and Venezuela could both have a big impact on near term oil markets.

Barely a day after analysts talked excitedly about $60 oil being a distinct possibility by the end of this year, now they worry that China could send crude plummeting below the $40 level.

Matt Smith, director of commodity research at ClipperData, raised the issue with CNBC's Squawk Box, pointing out that China is importing so much crude (about 787,000 barrels per day, which goes directly into storage, according to first quarter 2016 data) "it's absolutely insane: they're importing about a million barrels a day more than they are actually consuming."

Smith worries that the 135 million barrels stockpiled to date means China will  hit its maximum capacity of 155 million barrels within a month, at which point imports "will drop off a cliff."

With Saudi Arabia, Iran, and Iraq ramping up production, these factors combined may force crude to plummet to $40 per barrel or even into the $30s, Smith warned.

If that happened, Ship & Bunker data suggests IFO380 prices in the primary ports would slip back under the $200 per metric tonne (pmt) mark, compared to the $252 pmt level they were at last Friday.

Still, there seems to be too many outside factors at play for anyone to convincingly predict a return of ultra-low prices.

Nigeria, whose output has been credited as significant enough to rebalance the global market single-handedly, is said to be facing an almost insurmountable challenge in ridding itself of more attacks from the militant group Niger Delta Avengers, which has disrupted oil production in that country – and contributed to the spectacular gains in prices of late.

Additionally, civil unrest prompted by a worsening economy in Venezuela is taking an increasingly ugly turn, with reports of mass looting, the killing of animals for food, and political figures attacked in the street while police look on.

Speculation is rampant that Venezuela's economy could soon collapse completely, which would cause massive oil supply disruptions – and boost prices even further.

However, Matt Smith is not alone in his analysis: John Kilduff of Again Capital told CNBC last week that oil prices will likely decline after the peak summer demand is over, possibly to $30, and he was backed by Gene McGillian, broker and analyst at Tradition Analytics, who cited global oversupply as the persistent risk to prices, along with a possible U.S. interest rate hike that would strengthen the dollar and hurt crude prices.