Crude Oil May Rise on Signs Prices Fell Too Fast, Survey Shows
By Mark Shenk
Nov. 7 (Bloomberg) -- Crude oil may rise next week on speculation prices have fallen too far, too fast since touching a record in July, and on signs that interest-rate cuts may bolster fuel demand.
Twelve of 26 analysts surveyed by Bloomberg News, or 46 percent, said prices will increase through Nov. 14. Nine respondents, or 35 percent, said oil will decline and five forecast markets will be little changed. Last week 57 percent expected futures to increase.
Oil in New York has dropped 59 percent from the record $147.27 a barrel reached on July 11 on signs that the contracting U.S. economy is cutting fuel use in the biggest energy-consuming country. U.S. fuel demand rose in three of the four weeks ended Oct. 31, an Energy Department report showed this week.
``We have seen the market move incredibly fast to the downside,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``I think we've found a temporary bottom here and may see a brief moderation in prices. After moderating for a period we could see prices make new lows.''
The Bank of England and the European Central Bank cut interest rates yesterday to spur economic growth. Last week the U.S. and Chinese central banks also reduced rates.
``We are seeing rate cuts to boost economic growth and I believe this will bear some fruit,'' Beutel said.
Crude oil for December delivery fell $7.04, or 10 percent, to $60.77 a barrel so far this week on the New York Mercantile Exchange.
The oil survey has correctly predicted the direction of futures 50 percent of the time since its start in April 2004.
Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE NEUTRAL FALL 12****** 5******* 9 To contact the reporter on this story: Mark Shenk in New York at firstname.lastname@example.org.