Oil price tipped to take a tumble

OIL will drop more than 30 per cent to $US40 a barrel in March and may drop to $US30 as rising prices for storing crude lead to a “breaking point” that forces speculators to sell, according to investment bank Sanford C. Bernstein & Co.

Oil will slide because greater investment in commodity futures has driven the market into “contango”, according to analysts led by London-based Neil McMahon. The phenomenon occurs when futures prices rise above spot prices, often reflecting handling or storage costs.

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