Our weekly CNBC survey asks traders, analysts and strategists about their outlook for crude. Here are this week's results:
Total Responses: 12
- Bearish: 6 (50%)
- Bullish: 4
- Neutral: 2
Key Bearish Factors:
- Price is already factoring in an economic recovery
- IEA report shows China is storing more oil than expected
- The strengthening dollar
Key Bullish Factors:
- Supply overhang in the U.S.
- Economic data may suggest worst is over
John J. Licata, Blue Phoenix:
"I think the downside risk from current levels outweighs a further move higher both technically and fundamentally. OPEC meeting came and went, Hurricane Fred is weakening, the currency trade is losing some steam - for now - and refiners are in maintenance mode getting ready for winter blend fuels.
"The weakness in the USD against major currencies has already given bulls a reason to test $75 pbl and yet it didn't. We see this as short-term bearish."
"OPEC as expected was a non-event. The move to keep within compliance of quotas was as widely known as Brett Favre making another comeback."
"I think we can move back under $68 near-term but I am still looking for $80+ in the fourth quarter as OPEC may put coal in the market's Christmas stocking…Some funds I have spoken with are taking profits in crude and jumping into natural gas which has had the best 4-day move in 2yrs (and has legs over $3)."
Ong Eng Tong, Mabanaft:
"I guess our prediction that the market will go south was correct until it was spooked by the large drop in the US inventory. I still believe that the price cannot be maintained if OPEC position is status quo. Hope it will not be spooked again by drop in US inventory or a Hurricane."
Phil Flynn, PFGBest:
"I am still bearish and sticking to it. The IEA report showed China is storing more oil than thought, imports fell from rapid pace and the shrinking contango may bring some off shore storage to market in coming months. Still the main driver will be the dollar. Any signs of stability will help the bear case."
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Ben Westmore, National Australia Bank:
"Based on Chinese production continuing to surprise markets to the upside and improved sentiment carried over from this week following the IEA's upward revision to 2010 demand forecasts. The influence of these factors will be only partially offset by further concerns regarding the supply overhang in the US. The weekly EIA report did nothing to allay concerns around the glut of distillate stocks on the US market."
Gavin Wendt, Fat Prophets:
"I think we are looking at neutral prices for next week. Lots of positive data around and I think we are in the midst of an upward trend in crude oil pricing and demand. However, I think we will see prices consolidate next week."
Mike Sander, Sander Capital Advisors:
"Oil is being well supported by the ever higher Dow Jones index and ever lower US dollar, both hit a high and low for the year yesterday, I don't think that's a coincidence. I don't know what's going to stop oil from going higher in price over the future months. The trend looks good for higher oil prices. Seasonally oil does drop a bit in price in September/October period so we'll see if that happens. The US government is going to continue to print money, especially with the democrats in power. All of the excess dollars in the deficit is bringing down the value of our currency helping to boost the price of oil. At this point a run back to $60 looks very doubtful."