Real price for Brent should be between $70-75: Jonathan Barratt, AyersAlliance

From economy viewpoint, a price around $65 benefits everybody, Jonathan Barratt, CIO, AyersAlliance, tells ET Now.

Edited excerpts:

How structural is the oil move because it seems to be reacting to the Saudi energy minister’s comments?

The market has reacted. Saudi Arabia has said they would increase capacity. Perhaps it has got to do with the fact that US and Saudi Arabia have worked together and basically told Saudi Arabia to supply the markets and help lower the price. If anything, crude at $85 was too expensive. It is good to see prices fall back in a range and would probably continue to come off from these levels.


What is the right level for crude, is it $85 or is it $75?

$75, I think. When you look at $85, we have concerns on economic growth. When the market rally happened, it was a little bit hollow. The real price should be between $70-75 for Brent.

What is the range you are looking at currently for crude? What is the new normal we are looking for oil for the next one month?

Brent is up about 30% from a year. We have had about a 6% correction here. So, it is under pressure. If oil comes back to mid 70s or late 68, it is still within the range that the market would quote.

From the economy viewpoint, a price around $65 is something which benefits everybody. The aim would be to try and get crude where it benefits all. At $85, it does not, at $45 it does not. So, it is somewhere in the middle. The bifurcation point is more like $65 and $70 coming over into Q1, FY20. We maybe even have a dip over the next month or so.