Expert sounds the alarm on oil prices as rally fizzles

Despite its recent climb, one expert sees trouble ahead for oil.

Transcript

00:00What about oil? Where do you stand there? Well, I continue to be an oil bear. Now,

00:04obviously, I look like not so smart. The last couple of days, oil's had a little bit of a

00:10tear. But I'll remind people, commodities are generally in bear markets. Commodities spend

00:16more time in bear markets than bull markets. And this is because technology is deflationary,

00:20and we tend to get better at growing or extracting things as time goes on.

00:25And so with that said, we've seen since the peak of oil in 2022, March 2022, we've seen rallies fail

00:32over and over again. Some of those rallies have been very big. The last couple of years,

00:36those rallies have mostly been held to about $10 to $12, which is what we've seen now. We're

00:42roughly $10, $12 above the lows from Liberation Day. And so I think we're coming up against some

00:48pretty good resistance. I don't see any reason to be bullish crude oil. Like I mentioned, I think

00:54the US dollar is probably going to rally. And the relationship between the dollar and oil is

00:58normalizing based on the statistics. So what that means is instead of being positively correlated,

01:03which is what we've been the last couple of years since Russia invaded Ukraine,

01:06the dollar and crude oil are going back to its natural state, which is a negative correlation.

01:11And so if I'm right about the dollar, that's going to put pressure on crude oil. Also,

01:15we look at Chinese manufacturing data, and it's kind of in the tank. And Chinese data is not

01:21necessarily that reliable anyway. So if they're telling us it's this bad, it's probably a little

01:25bit worse. So I just feel like fundamentals and currency headwinds are going to work against

01:33oil. I continue to think this is a temporary rally, and we roll back over.