Brent rose above USD 108 after Libyan tribal leaders blocked several oil-exporting ports over the weekened. Speaking to CNBC-TV18, Jonathan Barratt, barrattsbulletin.com says if Libya does not reach a solution soon and the problem escalates, then Brent may go back to its higher levels of USD 112-115 per barrel.
With regards to gold, Barratt believes USD 1,270/ounce is the top and USD 1,220/ounce is the lower-end but may spike, depending on the decision taken the US Federal meet this week.Also Read: Buy gold on dips; stoploss below Rs 29100: Nirmal BangBelow is the verbatim transcript of Jonathan Barratt’s interview on CNBC-TV18
Q: Brent crude saw a bit of upmove on Friday. Do you see anything formidable above USD 109/barrel or do you think that Brent has seen the best in terms of levels earlier?
A: Brent is quite interesting at the moment. We are focusing on the developments that occurred in Libya just over the weekend and if anything is going to sway the price, it would be if we do not get a resolution in Libya.
The market was very complacent about coming for a solution to what is happening in Libya, but the longer it goes, I am starting to be get a little nervous. If it does escalate then we could see Brent trade quite higher again back to USD 112-115 level which is not a welcome move.
Q: What about the spread between Brent and West Texas Intermediate (WTI)? Do you think that will widen or is there scope for some more cut in that spread?
A: We know that fundamental picture for both Brent and WTI should be quite bearish and that spread should continue to come in. I am still nervous as to what will happen in Libya because that will be one event that we are not going to account for over the next month or so. So the spread should continue to come in as those bearish fundamentals take hold on the market.
Q: How would you be placed on gold?
A: Once again we have not had a good couple of months for gold. Based on the fundamentals, gold does not have a lot of good support mechanism, but I technically like the picture, because if USD 1,220 and USD 1,170 area holds then it is creating a good base.
We have had a lot of volatility in that market over the couple of weeks. USD 1,270 is the top and USD 1,220 is the lower-end. I think we will get a spike. It will be conditional on what we hear from the Federal Open Market Committee (FOMC) meet this week.
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