$210 Bunkers on the Horizon? Oil Prices are "Headed to $40 Before we go to $60 Again" says Analyst

Bill Baruch, chief market strategist at Chicago-based consulting and advisory services firm iiTrader says "we have passed peak demand."

IFO380 bunker prices in the primary ports could get close to hitting the $200 per metric tonne (pmt) mark before there is any significant upswing in prices, the latest thinking by Bill Baruch, chief market strategist at Chicago-based consulting and advisory services firm iiTrader, would suggest.

"This market is headed to $40 before we go to $60 again," Baruch told CNBC, and also noted that the International Energy Agency (IEA)'s July report states global oil demand is set to slow in 2016.

"We have passed peak demand," he says.

With bunkers typically priced at 70 to 75 percent of crude, $40 per barrel Brent would put bunkers in the $211 to $226 pmt range, or perhaps even lower based on the latest data from Ship & Bunker, which on Friday priced 380 cSt product in Rotterdam ($281.50 pmt) and Houston ($283.50 pmt) at 68 and 69 percent of Brent (54.62 per barrel or about $411.29 pmt) respectively.

Excess supply - the U.S. is currently producing one million barrels more than it was a year ago, and the Organization of Petroleum Exporting Countries (OPEC) is said to be over-producing by as much as 2.5 million barrels per day - plus expectations of a flood of oil form Iran, and global demand worries particularly form China, were all said to be contributing to the bearish sentiment.

Piper Jaffray's Craig Johnson also notes that crude has broken its 200-day moving average, an indicator that any uptrend is reversing, and says a return to the lows of 2015 is underway.

However Steven Kopits of Princeton Energy Advisors has a completely different take on the market. 

"Right now, oil prices are in La-La-Land," says Kopits

"I think investors have been watching the news and not the fundamentals. Current prices just aren't sustainable."

"The only way you could keep oil prices at current levels is if U.S. shale producers can demonstrate growth in quantity at current prices, and I just don't believe that's true right now.

"I see WTI north of $60 soon, and possibly north of $65."

In January Goldman Sachs Group Inc. (Goldmans) President Gary Cohn and, more recently earlier this month analyst Carley Garner, both predicted crude oil to fall as low as $30 per barrel, or $226 pmt, an event that could push IFO380 prices as low as $158 pmt.