Crude oil prices to remain volatile: Peter McGuire

"We are worrying about probably the demand picture inflation and all of those concerns. I think the overall move will be higher from here, but yes, it is certainly volatile and it is creating much opportunity from trading perspectives," says Peter McGuire, CEO, XM Australia

We are seeing a sharp decline in the crude prices in the week gone by. Do you believe going forward at least this $75-80 going to be the range or do you see it pulling back to the levels of at least $80-85?
I think that we have seen a pullback, it has been very sharp and I think it has been quite well received from traders. As far as consumers are concerned, that is a good sign, but producers are not happy. We are worrying about probably the demand picture inflation and all of those concerns. I think the overall move will be higher from here, but yes, it is certainly volatile and it is creating much opportunity from trading perspectives.

You expect OPEC to come out and slash production again because that is the only way they would be able to maintain prices now.
I think you might be right because I am worried about that. If that is the case and that happens, then that is really going to create a powder keg environment not only from the producer's standpoint, but the other side will be that if that is how it moves forward and coming into a summer driving season and certainly northern European and northern hemisphere summer, traditionally more consumption, that is really going to create angst for consumers and I would not be surprised if that was the strategy that may be delivered over the next month or so.

Do you think that the market to some extent as well is questioning the validity of OPEC's recent production cut amid the fact that we have strong exports of Russian crude?
Yes, I mean, that is a concern certainly. So, I think there are so many different components to this melting pot and we understand the Russia situation. So, it is hard to pinpoint where their strategy is going to be and where the overall themes are, but there are so many differing viewpoints. I mean, you only got to spend time with oil exploration or oil people and everyone has got a different opinion of where they see oil prices in the short to medium term. So, it could be that, yes, we see a little bit further downside and I would not be surprised to say this volatility remains.