14:45 DJS Analyst Believes Oil Prices Bottomed Out Late In Summer
14:45 DJS Analyst Believes Oil Prices Bottomed Out Late In Summer
NEW YORK -(Dow Jones)- Oil prices bottomed out late in the summer when
they broke the $13-a-barrel level and have been gradually returning to higher
groud, according to Jim Steel, senior commodities analyst with Refco.
"A couple of things are encouraging the market a little bit, from,
admittedly, very low levels," Steel said in an interview on the financial-news
television network CNBC Thursday.
"The political temperatures in the Middle East, particularly in Iraq,
have risen a little bit," Steel said. "In addition to that, possibly the very
worst is over as far as the decline in demand in Southeast Asia is concerned.
I'm certainly not saying that there will be a major recovery in demand there,
but the worst of the fallout there as far as energy consumption is concerned
may be over."
He also said that the Organization of Petroleum Exporting Countries,
which accounts for about 40% of the world's oil, might decide on further
production cuts at its next meeting.
"OPEC has largely complied with the cuts at the June meeting, although
they're still not up to full compliance yet," Steel said.
Still some obrservers, noting high crude inventories, said oil
producers, including members of OPEC, may have to reduce output further if
they want to see sustained price gains. Growth in demand for oil is still
being whittled down as Asian financial woes spread to other parts of the
world.
- Victor Ozols; 201-938-5394
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09/17 2:45p CDT
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