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Experts Mostly Bearish on Oil Prices: CNBC Survey

Monday, 5 Oct 2009 | 3:49 AM ET

Oil experts are expecting weaker oil prices in the week ahead, according to our weekly CNBC survey.

Key Bearish Factors:

  • A pull-back in equities is expected which will put pressure on oil
  • Supply still outpaces demand with inventories in the US and China remaining at very high levels
  • Quarterly earnings expected to be weak which wil hamper energy markets

Key Bullish Factors:

  • Iran jitters may add support to oil prices

Bearish themes:

Mark Hansen, CPM Group

"Fundamentals for oil remain impaired. It was constructive to see gasoline demand up last week but unfortunately I think it can come off again just as quickly. Distillate demand is what scares me (-9%) and heating oil supplies are also very high. Look at natural gas - record storage inventories!"

"We need an act of God - literally - in the form of very cold weather to work this off or its very bearish. OPEC is getting in line with their production numbers however, which is long term positive for the price when a real OECD economic recovery happens."

"I am not all that optimistic on quarterly earnings, and given the inverse correlation of the major stock markets and the US Dollar, should earnings disappoint somewhat, the dollar will strengthen and harm commodity prices for a bit."

  • IEA sees risk of Europe gas crisis this winter

Mike Sander, Sander Capital Advisors

"Supply still outpaces demand with inventories in the US and China remaining at very high levels. Iran has been in the limelight for some time with their nuclear bomb ambitions."

"Bottom line with that is the world needs Iran's oil so France, China, and others are still going to buy it."

Mark L. Waggoner, Excel Futures

"The Iran problem will not go away. That being said, they will agree to some concessions, but will drag their feet. No new sanctions will be enacted in the near term. "

"Earnings, we believe, are going to be better than expected. If those expectations are not met, the stock market may drop causing pressure for the commodity markets in general."

Neutral themes:

Rachel Ziemba, RGE Monitor

"I think Iran jitters might add a little bit of support to oil prices to stop them from falling further after all oil prices weren't that affected by another inventory build."

"But I agree that surplus capacity and Iran's dependence on crude prices suggest the effects might be more muted then in 2007 or even early 2008 when the markets were tighter."

"I continue to think that oil prices will be relatively range bound as they are buffeted by macro news."

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