Investment guru Mark Mobius has dismissed claims that an oversupply of crude is behind oil's selloff, and believes the end of the broader commodities rout is in sight.
"If you look at the supply and demand growth of oil in the last 20 years, roughly it's been 1 percent growth each year. But within each year, the [price] range has been plus/minus 5 percent," he told CNBC on Tuesday.
"The price is purely sentimental. It has no real relationship to long-term supply and demand."
Brent crude rebounded in Asian trade on Tuesday after losing 5 percent in the previous session, but still traded below $50 per barrel— its lowest level since January.
Mobius, chairman of Templeton Emerging Markets Group, a firm with over $880 billion in assets under management, also expressed disdain for price forecasts.
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"Nobody is an expert on oil prices, not even the top people in the industry. I sit on boards of some of these oil companies and their predictions are way off. They make plans based on where oil will be in the next year or so but with oil below $50, that's something nobody ever imagined."
Mobius' argument is in contrast to that of many traders, who pin oil's fate to the current oversupply, with the effect exacerbated by the fact that Iran—the world's fourth largest oil producer—has agreed to a nuclear deal that allows it to export crude again. Once Western sanctions are lifted, Tehran will be able to ramp up production by 500,000 barrels per day within a week, Iranian oil minister Bijan Namdar Zangeneh said on Monday.
Meanwhile, a survey last week by Reuters revealed July crude production by the Organization of the Petroleum Exporting Countries hit the highest monthly level since survey records began in 1997.