Moreover, OPEC also is comfortable with Brent crude around USD 100 per barrel, ads Lennox, which means they too are maybe expecting demand to be weak over the next few months.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: We have seen big strength in dollar; the dollar index is at 81, we have seen euro slipped to 133. So far we haven't seen any meaningful move in crude market. What do you think is likely to happen going forward. Do you see crude slipping a bit more or do you think the current mark should hold on for sometime?
A: At this stage the market has factored in a number of things that you would think would be impacting on the supply side and the fact that we are seeing excess supply coming out of the US market. That is something that we have been aware was going to happen sometime but we are now seeing those numbers improving. So, that is keeping the pressure on West Texas Intermediate (WTI) from rising significantly.
Although we are seeing some demand out of China, the expectation was that demand would be significantly higher. So that is also starting to put pressure on what we would have thought higher demand coming out of China. So, when you see fresh supply in crude oil in the US and perhaps lower demand in China then that certainly points towards perhaps just little more of easing in the crude prices going forward.
Q: It's been four straight weeks of losses that Brent crude has seen which in effect bodes well for emerging markets like India but what do you think the near-term range could be for crude? On the downside what would you watch for from now until the end of the year if this weakness continues?
A: One of the key things that we will be watching for the end of the year is those factors that have been potentially impacting supply. We are seeing the Iranian situation although let's do not come to any conclusion, there are negotiations going on and so that put the risk of supply shock from that region now on the back foot.
We also think when you have a look at what is happening in other areas around there, we are seeing subside of some political risks in number of the areas and we do think that that is probably going to be one of the key factors that market will be watching for in the next few months.
We also think that Organisation of the Petroleum Exporting Countries (OPEC) is going to play a significant role as well going forward. They have come out and said that they are quite comfortable seeing Brent at about USD 100/bbl, so for them to do that or to say that - they are expecting that demand will probably be weaker over the next few months because we are thinking that they are not going to change their current production rates.
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