XM Australia CEO expects oil to stabilise near $80-82/bbl, finds silver promising
Peter McGuire, CEO of XM Australia anticipates 2024 to be a year of slower growth.
Peter McGuire, CEO of XM Australia believes oil could stabilise in the range of $80-82 per barrel. The exhaustion in the oil market is not uncommon, indicating that current price movements may be a result of such fatigue, he said in an interview with CNBC-TV18.
“I think there's probably a little bit further downdraft at the moment. US Dollar index hitting 107.30, it's given back a little bit of that heat as well and any market that was parabolic over 100 days as far has moved to the upside, it’s not unusual to see exhaustion. And that's a technical term. So it gets exhausted to the upside. It takes a little bit of a breather, I think all the heat comes out of it and that's what we've seen in that quick washout. And I think it'll consolidate around that $80 to $82 per barrel level,” he said.
There is ongoing significant profit-taking in the crude oil market. On Wednesday, there was a 5% decline, followed by another 2% drop overnight. Consequently, crude oil prices have fallen by 12% this week. Just at the end of September, crude oil prices reached a peak of $96 per barrel, but they have since plummeted to $84 per barrel, marking a substantial $12 decrease. Currently, prices are at their lowest point in five weeks, largely due to fund managers taking profits.
Additionally, the market has seen an increase in gasoline stocks and a stronger US dollar index, both of which are contributing to the downward pressure.
Investors are keeping a close eye on today's release of US non-farm payroll data for further market direction.
The market is also monitoring Saudi Arabia and Russia's decisions on future output levels, as well as economic data from China and Europe, which will provide context for future price movements.
“Saudi Arabia and Russia control the flow as far as the Organization of the Petroleum Exporting Countries (OPEC). And they probably are looking at where their budgets are. We have a protracted war situation with Russia and Ukraine that hasn't been put to bed as yet. And that's costing obviously, big amounts of revenue. And then the Saudis naturally want higher oil prices. That's my understanding as far as a budget issue goes as well," McGuire said.
If this rolls into 2024, he thinks it will be interesting to see how central banks play moving forward.
He expects 2024 to be a year of slower growth.
“2024 is going to be a slower year from a growth perspective. I still think India is booming. You've only got to see it out here as far as construction and what's happening. So there are different parts of the global economy that are under different headwinds. And I feel as though there are some parts of Asia that are really struggling,” he stated.
He shared his positive outlook on the silver market. He indicated that silver appears to be a promising commodity and suggested the possibility of an upward trend in its value.
“Silver is really a very hot commodity. So I think there's plenty of time for an uptick for silver as well,” he stated.
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