NEW YORK (TheStreet) -- For more than two years oil prices have been tumbling due to an excess of supply around the world. Recently key players in the industry have pronounced that the supply glut is over, but those feelings are beginning to dissipate, Bloomberg reports.

Oil prices are trading lower on Friday morning, with crude oil (WTI) sliding by 0.83% and $40.80 per barrel and Brent crude down by 1.48% to $42.07 per barrel.

Earlier this year oil prices broke the $50 per barrel mark as supply outages in Nigeria and a huge wildfire in Canada disrupted production. However, oil is set for a 20% drop since early June, Bloomberg added.

Again Capital and CNBC contributor John Kilduff appeared on this morning's "Squawk Box" to discuss his bearish view on oil and why he thinks the price of the commodity will drop below $40 per barrel.

"They're making too much of this stuff," Kilduff said. "They're making too much gasoline, they're pumping out too much crude oil. Interesting on the Chevron (CVX) - Get Report earnings, in a downturn like this that they are going through, these companies, you're going to see them throw everything and the kitchen sink in terms of writing stuff off to get balance sheets levered for an upturn in the next year or so."

Chevron reported a loss of 78 cents per share for the 2016 second quarter, on revenue of $29.3 billion, a 27% decline from the same quarter last year. Earnings were pressured by weak oil prices. 

"For now we are heading back down, I think we are going to go as low as $35, this is a glut for the ages," Kilduff added.

Kilduff sees more bankruptcies in the future for more oil companies, however he noted that he isn't a permanent bear on oil prices listing a rise in the rig count and some hedges in the market as some positives.

Separately, TheStreet Ratings has set a "hold" rating and a score of C on Chevron stock. The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: CVX

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