U.S. crude posted its first monthly gain since June on Friday, but one expert warned that storage in the United States is filling up quickly, and that could send oil lower.
“We are really close,” said Bank of America Merrill Lynch’s Francisco Blanch, noting that storage could run out by the end of March or early April.
Blanch, the firm’s head of global commodities and derivatives, told CNBC’s “Power Lunch” that means the only option for oil producers will be to sell and therefore prices can’t hold up.
“For WTI, we see those pressures being very pronounced over the next few weeks,” he said.
Oil inventories in the U.S. were up 8.4 million barrels last week, according to government data.
On the other hand, the international market has held up a little better, Blanch said.
“We’ve seen somewhat less oil being produced out of OPEC for unexpected reasons, but the market is still oversupplied.”
Those reasons include the domestic turmoil in Libya causing it to produce very little oil and disruptions in Iraq because of weather, he noted.
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