CERA sees potential oil rebound

HOUSTON (Reuters) – Current oil prices are not justified in the face of weak global demand and a glut of spare supply, but oil supplies could tighten in the next three to five years, energy analyst Daniel Yergin said on Monday.

U.S. oil futures rose more than 2 percent to a seven-month high of $68.29 a barrel on Monday due to rallying stock markets and sustained expectations for a global economic recovery.

But crude oil’s biggest monthly gain in a decade has more to do with rallying equity markets and a weak dollar than actual oil demand, Yergin, chairman of IHS Cambridge Energy Research Associates (CERA), told the Reuters Global Energy Summit in Washington.

“The weakening dollar is part of it,” Yergin said. “What’s not part of it are the fundamentals of supply and demand which do not support a price like this.”

Reuters