Thomas says demand fundamentals remain unchanged and he expects supplies to remain stable, balancing renewed efforts by the Russians to increase production against violence in Nigeria. “But long term, you want to be long.” During January, he expects February crude to bang around between $58 and $64 per barrel.
Thomas Hartmann, an analyst at Altavest Worldwide Trading, agrees that production cuts are not a credible threat, and that Venezuela and Indonesia have indicated a willingness to increase production and probably would not comply with proposed production cuts. After the market finds a bottom and solidifies, a rally based on gasoline demand may be in the works. He says warmer weather has extended the driving season and notes inventories have fallen 10% in the last 10 weeks because refiners can’t keep up with demand. He picks a bottom of $61 and a top of $68.