Given the supply scenarios for Brent, David Lennox of Fat Prophets does not expect any upward pressure on price from the supply side. At this point in time, there is amply supply, he says.
On Brent crude, he had set a target of USD 92-120 per bbl. He says there will be some volatility within the range, but no breakout.
Below is the verbatim transcript of David Lennox's interview on CNBC-TV18
Q: We have seen quite a bit of a decline in crude; Brent is down from USD 117 per bbl to USD 107 per bbl. Do you think it is headed towards USD 100 per bbl or Fed outcome can change things?
A: We certainly think with easing of tensions around Syria there has been risk-off coming out of Brent prices and we have seen it now move fairly quickly back into USD 108 per bbl region. We do think when you have a look at the supply scenarios for Brent; we are not expecting any great upward pressure on price from the supply side. At this point in time there is certainly ample of supply.
Q: What is your target for Brent crude in the medium-term? Do you expect it to hover around these levels or could Brent slip lower than the current levels of around USD 108 per bbl?
A: The target that we set back in November-December last year between USD 92 per bbl and USD 120 per bbl, we think given the actual supply and demand equation for crude there is no significant pressure at the moment that can push the price up or push the price down. We are quite comfortable to suggest that there will be some volatility within a range, but not a breakout.