Crude has cooled down to about $70, and that is good news for financial markets across the world. Jason Feer, VP & Singapore Bureau Chief of Argus Media says that there is a possibility that one could see prices going substantially lower.
Excertps from CNBC-TV18's exclusive interview with Jason Feer:
Do you expect to see USD sub-70 levels soon?
We have pulled back and forth between political events like what's happening in the Middle East, Iran and Nigeria, and what's actually happening with the fundamentals.
On the fundamental side, what we are seeing is a slowing of growth in the US economy. That has got people hopeful that growth in oil demand will soften somewhat. So on the fundamental side I could see prices continuing to dip, but I think the big question these days is politics.
Has the trading sentiment on crude changed to a market where people are looking to short rather than accumulate when it dips?
There has been lots of fear from some of the traders that you could see a very sharp correction particularly if the political situation with Iran or some of the other trouble spots in the world begin to ease.
On the fundamental side there is plenty of crude oil in the markets these days. The Middle Eastern producers really can't sell every barrel and certainly over the past couple of years we have seen new production coming on stream at a time when higher prices have appeared to push down growth in demand. So there is a possibility that one could see prices going substantially lower.
For more on markets & business, log on to www.moneycontrol.com
