See crude at $118/bbl soon: PJ Commodity Ventures

Shreekant Jha of PJ Commodity Ventures said crude might hit USD 118 per barrel. “USD 130 per barrel is a support that we were looking at last week, when crude was at USD 147 per barrel and people were talking about USD 155 per barrel. This break of USD 130 per barrel will make it probably test USD 123 per barrel and maybe USD 118 per barrel as well. At this juncture, we are better off looking at supports.”

Excerpts from CNBC-TV18’s exclusive interview with Shreekanth Jha:

Q: How do you look at crude prices? We have seen a considerable sell-off this week. Do you think it would continue in the coming week as well?

A: USD 130 per barrel is a support that we were looking at last week, when crude was at USD 147 per barrel and people were talking about USD 155 per barrel. This break of USD 130 per barrel will make it probably test USD 123 per barrel and maybe USD 118 per barrel as well. At this juncture, we are better off looking at supports.

Q: But would you sell at these levels or would you be cautious?

A: We would be cautious. It is still in an upmove. It is just that the upmove is correcting. So, we would probably look at getting in at a lower level as a buy rather than trying to sell short.

Q: How would you trade gold because that has not fallen as much as crude prices and it is still holding around USD 960 per ounce?

A: Gold is a very good trade. It touched USD 970/oz and then went to USD 990/oz. Now, it is just correcting that trend. If it supports at USD 946/oz, then that will be a fantastic buy for the slightly long-term.

Q: There have been certain reports saying that gold-crude ratio could come back to 10:1. Would you agree?

A: I don’t know about the ratio. But at this juncture I would go for gold.