Crude may slip to USD 85/bbl

Here is a verbatim transcript of Manisha Gupta's comments on CNBC TV18. Also see the accompanying video.

 

Crude is back above USD 90 per barrel at this point in time. Crude is off its 8-month low it has to do with a bit of tropical storm Marco that is also supporting the prices because many rigs and oil rigs have been shut in Gulf of Mexico, that is one factor that is supporting the prices. We have seen a very sharp decline in last 4-5 days and there has been some short covering and bargain buying in the market's today, prices are still 8% down in 2008 and they have declined 40% from their record highs and demand has been weakening.

 

The making of gasoline actually- the profit for that has negated and many people have stopped their refineries and closed down their refineries. So you might see some supply shocks so that is what is supporting the prices because the peak heating oil demand would kick in from next month though Organization of the Petroleum Exporting Countries (OPEC) production has been down by 1.5% in the last month.

 

We have seen Iraq production go down by nearly13% in the last one month and these factors have led to some support in the prices. We have seen a support at USD 87/bbl but prices could go upto to USD 85/bbl on the lower side, USD 85/bbl to USD 95/bbl is a near-term range that you might see happening into crude prices.

 

But strength in crude prices has given some support to gold prices as well. We have seen good demand in the physical market ahead of the festival season across globe and that is what has led to nearly USD 20-25/oz of gains in case of gold prices. Gold might see some consolidation and we are looking at ranges between USD 920/oz on the higher side to nearly USD 840/oz on the lower side in the coming couple of days.