Credit Suisse: Crude to $50 by May

This isn’t exactly a bold call. Oil demand always spikes this time of year. Let’s see how this analyst feels about oil in August.

Nevertheless, this CS analyst thinks crude gets to $50 by May.

I don’t like the call for a number of reasons, the first being oil is up 50% from the lows.

“Oil demand growth is alive and well,” he writes in a recent note. “We think that with hindsight this winter will look like a dip in an otherwise still unfolding fairly strong growth trend that is partly fueled by the ongoing economic recovery of in North America and Europe and longer standing trends across key emerging market economies.”

“While on balance oil demand growth appears relatively sluggish still in the first quarter; February data either improved on January (e.g. Brazil, the U.S.); or extended strong growth (e.g. India, South Korea), while in China demand appeared to have rebounded as well,” he writes.

“We forecast modestly re-accelerating demand growth over the course of this year, so long as a recession continues to be avoided,” asserts Stuart. “We project in fact that oil demand should continue to outperform historic correlations with industrial production.”

Since I’m short oil via XLE, I’d like to see this analyst trip and fall into a banana cream pie. Demand for crude ahead of the driving season is always robust. Like I said before, let’s see how things look in the summer.