WTI crude oil prices dipped back below $40/bbl on Monday for the first time in several months on growing concerns about U.S. gasoline oversupply and fears that global producers are ramping up crude production too soon.

According to Paradigm Capital analyst Ken Lin, oil stocks will likely continue to be pressured by seasonal weakness in the oil market.

“We expect prices to exhibit historical seasonal weakness over the short term and rally at the end of Q4/16 and into 2017 as the supply/demand equation becomes more balanced,” Lin explained.

Paradigm upped its WTI crude oil price forecast for 2016 from $36.50/bbl to $45.00/bbl. The firm also upped its 2017 price forecast from $42.50/bbl to $52.50/bbl.

Despite the positive longer-term outlook for oil prices, Lin remains cautious on oil stocks in the near term.

For now, Paradigm is focusing…

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