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Oil Could Hit $30 In The Short Term

Summary

Oil has hit $40 per barrel.

Number of oil rigs have increased in 8 out of the last 9 weeks.

Rig additions should slow at $40/bbl, sending a positive message to the market.

If long-term futures hold, rig counts will increase again.

International producers will continue to put pressure on oil price. Domestic production is unlikely to decline significantly in the short term.

A bit over a month ago, I was concerned about Chesapeake's (NYSE:CHK) exposure to commodity prices, and I believed that investors should protect themselves through futures. At the time, oil (NYSEARCA:USO) was trading at $50/bbl. There were a lot of oil bulls back then, and there are still a lot today. But with more bad news...


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