Demand-based rally may take Brent to $115/bbl: Barratt

In an interview to CNBC-TV18 Jonathan Barratt, barrattsbulletin.com spoke about the Iran nuclear deal, crude price and its affect on Brent going ahead.

Also Read: Iran deal to help if insurance sanctions lifted: Mercator

Below is the verbatim transcript of his interview on channel

Q: What are your thoughts on crude? Was the initial reaction to the Iran nuclear deal when we saw Brent falling to USD 108 an overreaction?
A: Yes, I think. The news having come up over the weekend gave Asia a chance to really start selling it. We have seen moves like that before where the Asian market tends to push prices to their extremes and then we see Europe and United States come in and a bit of rebound and that is exactly what would have happened. It is interesting to see the robust nature of the move we saw in Brent because it has pretty much reversed a lot of those losses already. Q: What is the likely trajectory going forward? Do you think it can breakout of this range that it has been for better part of last year; USD100-110 or so?
A: It is quite an interesting juncture to see both the oils have this bounce in the wake of supply of impending 1.5 million barrels coming back into the market. Last week, we saw a draw in inventories. That certainly set the market a bit more aggressive to the topside. If that can be sustained plus we get some good economic data out of United States and Europe then you will see a little more demand. Brent is still being constrained by the occurrences or the problems in Libya and whilst we have that restriction in its supply there, you can see that spread remain where it is in the past to try and edge up a lot more over West Texas Intermediate (WTI) contract. Q: What is the range on Brent crude?
A: We are right at the top end of the range. When I look at it, USD 112.50, if that area goes then we can see a bit more to the topside. I really want to see some good economics to say that the movement in price of oil is on the back of increased demand rather than just a shortage of supply which makes the rally hollow. But when we look at it, if it is sustained, then USD 112 will be broken, we will be back up to USD 115.