Crude correction normal, may rebound ahead: Swiss Asia Capc
Commodities have been on a roller-coaster ride through the past year and a half. After crude spiraled to a lifetime high of USD 147 per barrel last year, it soon pummeled to USD 30s per barrel range on the back of the economic recession that gripped the world. It again saw a swift bounceback to USD 72 per barrel but has since pulled back to USD 59 per barrel.
Juerg Kiener, MD and CIO, Swiss Asia Capital, said such 25–30% corrections were usual in the commodity space. He added that crude had significant support at USD 50 barrel. Fundamentally too, he said the picture for crude was bright ahead, “due to the fact that replacement value on 4.5 million barrels of oil, which we are using on a daily basis cannot be replaced as reserving resources. So due to the capex shutdown last year in the whole industry and the drilling reductions overall, the picture going into next year looks very positive indeed.”