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DAVID KOTOK: Oil could fall to $15

Aug 17, 2015, 23:20 IST

David Kotok, cofounder and Chief Investment Officer of Cumberland AdvisorsBloomberg

Oil prices have hit six-year lows, and Cumberland Advisors' David Kotok thinks the worst may be yet to come.

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"We could go back to $15 or $20, this is a downward slope, we don't know a bottom," he said Monday.

WTI crude oil futures are trading near $42 a barrel while Brent futures are just above $48 a barrel.

Kotok said that despite the oil industries apparent belief that things will get better, there is little reason for anything to change.

"Hope is not a strategy, it's a myth," he said. "The fact is, we don't have the drivers."

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The good news is that there's good news. When asked about the lack of an increase in consumer spending despite the more favorable oil and gas prices, he said it will come.

"When the oil price goes down that means you get the first kick, but the you have to wait for the consumer to wake up and say 'Gee, I'm going to have more money for longer, I'm going to spend it'," Kotok said. "I think that there is a huge boost in consumer spending coming when people begin to accept the fact that this is a permanent shift not a temporary shift."

Check out the full interview at Bloomberg>>

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