Will Oil Stay Below $60?

Jason Schenker, economist, Wachovia Corporation was on RoBTV today talking about oil and its impact on oil stocks

On Oil Price
through the rest of the year we see the average price of crude around $63/barrel..next few weeks is shoulder period..neither peak gasoline nor peak heating demand so price could be very volatile..

On Cutting Oil Production
OPEC actually cut down production by 185,000 barrels/day in September..Kuwait, Nigeria and Venezuala talking about cut production..reason why they talk is because decrease in buyers

Oil Price + Economy
we put risk of recession at 30%..think more of soft landing..price at $55-60 in coming year (if soft landing)..

Geopolitical Fear
market done overestimating fear..no matter what happens, Iran will not cut off oil supplies..80% of their exports

Global Oil Cushion
inventories have built all over the world..well supplied..current price lowers than future prices provide incentive to build inventory..

Heating Oil Market
not cold enough to warrant significant heating oil demand..after Labour Day, slump in gasoline prices

Republicans and Oil
talk about Republicans institution conspiracy slightly absurd..El Nino and hurricanes are something Republicans cannot control

What Drives Oil Price
supply-demand fundamnetals, weather

What Should Investors Do?
making specific recommendation beyond my scope..be aware of price of oil trend..we forecast $60-70 oil..