Oil hit its lowest level in nearly a month last week, but one of Wall Street's top commodities analysts says a recovery is on the way in 2016.
Global head of commodities strategy at RBC Capital Markets, Helima Croft, predicted that oil will rebound following a scheduled meeting between OPEC and non-OPEC members on April 17th in the Qatari capital, CNBC reported.
"We spent an entire year with [Saudi Arabia and Russia] saying everything was fine," Croft explained.
"Their decision to come out and even mention a freeze was a catalyst for the rally" that recently pulled crude to within view of $40, Croft said. "As we look toward the April 17 meeting, I don't think Saudi Arabia would even show up in Doha if there wasn't going to be an agreement."
Speculation over a potential accord between OPEC members has whipsawed global energy markets. According to a statement from Qatari Energy Minister Mohammed Bin Saleh al-Sada, approximately 15 producers representing 73% of global oil output will meet to discuss the possibility of a production freeze.
For now, Iran's contribution is in doubt, because Tehran is seeking an increase of exports following the lifting of sanctions earlier this year.
However, oil analysts say the market remains oversupplied, keeping a cap on crude prices. Croft told CNBC that could easily change if the world's largest oil producer takes action in the near term.
"If Saudi Arabia freezes at their January levels, and that holds through the summer, that's an effective cut of several hundred thousands of barrels a day," noted Croft.
In terms of gauging the market, Croft sees a "quiet period" taking effect, wherein US oil will likely slip to $35 ahead of the meeting.
In the long-term, Croft noted that getting oil back to $50 per barrel will take time, but is doable assuming major producers continue to struggle with their supplies. She added that the move from $50 to $60 per barrel will be harder, because of the need to work off the inventory, which is typically a slower process.
