Crude May Rise to $49 - Then "Watch Out" for September

A sixth consecutive day of market gains has failed to inspire confidence among analysts.

Thursday trading resulted in a sixth consecutive day of gains, with West Texas Intermediate closing 19 cents higher at $44.93 per barrel and Brent settling 11 cents higher at $47.42, which prompted Joe Cusick, financial advisor at The Cusick Group, to call this a "moral victory" for the bulls.

But Cusick still thinks $44 is "the sweet spot" and "the bulls are going to have to take what they can get."

He went on to note, "I think there's going to be stiff resistance if you start getting in any higher than that $46-$47 level ... the bottom line is we have a glut, we have a five year high, there's over 500 million barrels in storage ... they're going to have to start cutting back on production if anything."

Dennis Gartman, respected editor and publisher of The Gartman Letter, agrees: he told CNBC, "There's a real problem out there in the crude oil market.

"You're going to get a rally and the market is rallying today; it's been rallying for the past four or five days [but] it is nothing but a dead cat bounce."

While admitting that crude could rally to $49 over the next few weeks, Gartman remarked, "I'll go with the Deputy Crown Prince of Saudi Arabia, Mohammed bin Salman, who has made it abundantly clear that he thinks crude oil over the course of the next 20, 30 years is going to be essentially worthless."

Ira Epstein, senior market analyst at Ira Epstein Division of Linn & Associates, thinks the market will gain traction in the $42 to $44 range "with a bounce maybe into the high $40s," he told Bloomberg television, adding, "not bullish; looking for a bounce."

When asked why a bounce would occur after the July 4 U.S. holiday weekend, Epstein replied that it would be the outcome of a delay in the demand cycle and prior to "a terrible fall and winter demand ... watch out come the end of the summer."

What's notable about Thursday's commentaries is that while they focus on the current market, they don't exclude an examination of what is coming down the turnpike.

This would presumably satisfy Stephen Schork, president at The Schork Group, who earlier this week said it was "silly" to try and predict market conditions on a weekly basis and called for a greater assessment of seasonal trends - and with this in mind he echoed Epstein's sentiments by stating that oil dropping $9 over the past few weeks "has to be a concern for the bulls, because oil demand has never been stronger ... what happens in September?"