Tags: Edwards | oil | prices | 30

Canadian Oil Exec Edwards: Oil Prices 'Could Spike Down to $30'

By    |   Monday, 01 December 2014 02:39 PM

Oil prices have plunged 36 percent since late June amid sluggish demand and mounting supply. And Murray Edwards, chairman of Canadian Natural Resources, says the commodity might have a lot further to go, though he doesn't expect it to be lasting.

"On a given day you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit," he told reporters in Canada last week, according to the (Canadian) Financial Post.

"Prices could spike down to $30 a barrel, $40. It got down to $35 in 2008, for a very short period of time."

After dropping to a five-year low of $63.72 Monday morning, January U.S. crude futures rebounded to $66.68 on the Nymex.

If oil does hit $30 or $40, "I don't believe that it will stay that low for long, because you will see increased demand and supply respond," Edwards explained.

"The better question is where does it stabilize, and that $70 to $75 area is probably not a bad place to stabilize until you get more balance in term of growth in demand and some supply response," he noted.

"Right now we have more supply than we have demand for a period of time. The market is now going to find a price which best reflects what it costs to produce a barrel of oil . . . nothing solves low prices like low prices."

Meanwhile, energy stocks have slumped, with the S&P 500 Energy stock Index dropping 8.9 percent last month. And many experts expect the descent to continue.

"I think it's too early to look for bargains in the energy sector," Margie Patel, a portfolio manager at Wells Fargo Asset Management, told The Wall Street Journal.

"If their [energy companies'] earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices."

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Oil prices have plunged 36 percent since late June amid sluggish demand and mounting supply. And Murray Edwards, chairman of Canadian Natural Resources, says the commodity might have a lot further to go, though he doesn't expect it to be lasting.
Edwards, oil, prices, 30
318
2014-39-01
Monday, 01 December 2014 02:39 PM
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