ABN Amro Private’s Roth Says Oil at $140 Will ‘Destroy Demand’
Daphne Roth, head of Asian equity research at ABN Amro Private Banking, which oversees more than $14 billion in the region, comments on oil prices and the turmoil in Libya.
The Arab League is studying a plan proposed by Venezuelan President Hugo Chavez to end the violence in Libya, Al Arabiya TV reported, citing Secretary General Amr Moussa. Oil futures in New York slumped as much as 1.8 percent to $100.37 in after- hours trading.
“If we can have a peaceful resolution on this issue, oil prices coming down will definitely benefit sentiment. At the moment, we’re dealing with a lot of uncertainty not knowing if the unrest is going to spill over to the other nations.
‘‘If prices are around $100 or $120 for Brent, the main beneficiaries will be the exploration and production companies. If oil prices shoot up to $140 or $160, that would definitely destroy demand. I don’t think if the global recovery is derailed it would be good for energy companies.”
For West Texas Intermediate crude, “between $70 to $90 would be a sweet spot for oil companies. That would mean recovery remains on track and is boosting demand. Oil companies can also take comfort and invest a lot more in capital expenditure, and that will also help the sub-sectors within the energy sector.”
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