Gaurav Sharma, Oil Analyst at Sharecast, joined Tip TV to note that the impact of the USD is a major concern than the China stock market fiasco, and believes that the oil market is about to find a floor.
Key points:
- Markets spooked by China
- China crude imports not as bad as it seems
- China continues to position itself as a regional refined products powerhouse
- Market in danger of walking into a crisis
- FX decline enormously damaging for the industry
People overplaying China scenario
Sharma says that China is still a substantial importer of oil and markets are currently spooked. The strength of the dollar and the Fed rate hike ahead are the risks ahead and the oil markets can’t do much about it, according to Sharma. He believes that predicting a sell-off on Chinese demand is foolish.
Oil about to find a floor
Sharma believes that the oil market looks like it is about to find a floor. He comments how the Chinese demand for oil remains more or less the same, averaging about 7 million barrels a day, and no fall in demand is seen. The end of year equilibrium target remains at $60 and once it becomes apparent that supply side effects are happening, the price will start heading higher, according to Sharma.