A Calgary energy analyst is suggesting the price of oil could fall below $60 per barrel this month.

Martin King was the FirstEnergy Capital analyst who forecasted oil prices could tumble to $65 back in October — a suggestion that caught many by surprise but turned out to be correct.

"I've been through this process before where maybe I didn't get aggressive enough to the downside. I thought, well if this is really going to be a major meltdown in prices, then what in my mind makes sense in terms of a low point for oil prices."

The decision by OPEC countries, particularly Saudi Arabia, not to cut production levels was one reason for the subsequent plunge in prices.

Market turned upside down

In a report released this week, King said the global crude oil market has been turned upside down, radically changing perceptions of how prices will evolve over the next few years.

West Texas Intermediate (WTI), the most commonly traded North American contract, fell $1.18 today to $65.63 US.

He predicts North American prices will fall even further, possibly even dipping briefly into the upper-$50s per barrel later this month.

"It's now December, it's the end of the year, there is going to be a lot of people cleaning up their trading books and financials," he said.

Optimism for New Year

"Some of that will involve people who are going to keep selling crude oil or shorting crude oil and you could see another sharp pull back here because it seems like sentiment never gets cleaned up until we start a new calendar year.

"That's very short term, but that's something that could happen as the market finally flushes itself out and then starts the year on a new foot and hopefully higher prices.”

Oversupply of oil around the world remains a key reason for the oil price crash, King said.

But prices will begin to slowly improve next year, averaging around $70 dollars per barrel, he said.