Oil prices will get a heck of a lot worse before they get better, a top industry analyst said on Tuesday.
Tom Kloza, chief oil analyst at Oil Price Information Service, predicted that oil prices would bottom during the second quarter of the year "simultaneously to one of the expirations of the WTI contracts."
He warned that the price of West Texas Intermediate crude (New York Mercantile Exchange: @CL.1) could be in the $30s at some point in the second quarter.
"I think the cycle has a long way to run out," Kloza said, adding that the spread between Brent and WTI could widen to about $10 or so.
"It's still about oil shale, and the rig count is very misleading," Kloza said.
He noted that there were about 500,000 wells in the U.S. that produced fewer than 15 barrels of oil a day. "We're gonna fill up in storage, and it doesn't appear that there's any way around that," Kloza said. "Some of the additional crude oil from the water will come to the United States simply because we have the facilities to store it."
Benchmark crude prices have more than halved in the last six months.
Brent crude fell about 3 percent on Tuesday, halting a three-session rally, after the International Energy Agency forecast that ample supplies will raise global inventories before investment cuts begin to significantly dent production.
Meanwhile, U.S. crude oil futures settled down $2.84 at $50.02 a barrel.
Last month, Kloza projected the average price for regular unleaded gas this year would be $2.49 per gallon, about $1.10 per gallon less than in 2014.