NEW YORK –- Investment management and research firm Sanford C. Bernstein & Co. predicts oil will drop more than 30 percent to $40 a barrel in March and could even drop as low as $30, as rising prices for storing crude lead to a "breaking point" that forces speculators to sell.

Analysts told Bloomberg,com that oil will decline because greater investment in commodity futures has driven the market into "contango," a condition that occurs when futures prices rise above spot prices, often reflecting handling or storage costs.

The Bernstein analysts said the "breaking point" could come in March if Saudi Arabia fails to cut production below eight million barrels a day. Spare capacity would rise, they said, widening the contango and driving investors out.

After four years of fund flow into commodity futures, one Bernstein analyst said investors in oil are now struggling with how to generate a return with the curve in contango and a negative roll yield.

Crude has averaged $$55.76 so far this year.

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