Oil’s sharp slide has surprised markets. But some traders now see a bottom for prices

The recent slide in oil prices is starting to bottom out, according to analysts who predict that a more significant pickup in the coming quarters is in the cards.

Oil prices saw their third consecutive weekly decline last week, marking the longest losing run this year. However, that may soon come to pass, according to some market watchers.

“Now it definitely feels like they’re at the bottom — there are multiple signs of that,” said Citi’s Global Head of Commodities Research Ed Morse.

“Inventories built a lot during the first and second months of the year, and then they’ve come off. So that’s part of figuring that it’s at the bottom.”

He added that markets are currently facing the impact of OPEC+’s recent production cuts, and the world is moving into a higher demand season. Last month, the oil cartel announced it was slashing output by 1.16 million barrels per day. The cuts came into effect in May and will run until the end of 2023. The production declines prompted some analysts to warn prices could surge to triple digits, which failed to materialize.