Oil prices tumbled from triple digit highs last summer to double digit lows and it looks like it will stay that way for some time.
However, Jan Stuart and his team at Credit Suisse this morning told clients in a research report that if oil prices fall below a certain line, then it makes it highly likely that prices will crash further to around $20 per barrel.
This is what Stuart and his team said (emphasis ours):
Critically important, because if Brent were to fall through $34.55 or WTI below $32.40 there would be little in the way of crude oil benchmark prices falling into the $20s per barrel.
That is not great, the more so since in this year-end low-volume trading stretch crude oil markets can be pushed around with less effort.
Visually, these are the price barriers that oil prices have the breach, according to Credit Suisse:
Brent crude oil prices hit their lowest level in more than 11 years this week but have recovered ever so slightly to $36.49 per barrel as of 8.31 a.m. GMT today.
Credit Suisse reiterated earlier this week in a Global 2016 outlook compendium of notes that while oil prices are set to nearly double from their current level to around $60 per barrel by 2020, this is still dramatically less than what it was last year.
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