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Oil Price Rebound to Continue Past $40, Near-Term Bottom Has Been Reached

After Monday’s selloff in crude prices, one analyst thinks the closely watched commodity has reached a bottom.
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After Monday’s selloff in crude prices, one analyst thinks the closely watched commodity has reached a bottom. ‘I think [yesterday’s selloff was overdone],’ said BRG Brokerage president Jeffrey Grossman, in an interview from the New York Mercantile Exchange. ‘I think prices should moderate in the low 40s to mid-40s. We’ve reached a bit of a bottom in the near-term.’ West Texas Intermediate rose 3.3 percent to $39.49 a barrel in midday trading on Tuesday, following Monday’s close below $39, which hasn’t occurred since 2009. The uptick Tuesday was fueled by yet another interest rate cut by the Chinese government in an effort to quell worries about the stability of its economy. ‘The Chinese government and economy seem to be the wild card about a lot of financial issues,’ Grossman said. ‘I think China was the tipping point that took us down to the levels we’re seeing, though the market was under pressure - there’s plenty of inventory and consumption hasn’t been anything more than what was expected.’ Going forward, Grossman sees $45 prices in the next month or so, assuming nothing catastrophic topples the market. ‘I just think the market has to reverse and retrace a bit,’ he added. Meanwhile, shares of oil giants Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP) rose on Tuesday, after reaching a low for the year on Tuesday. TheStreet’s Scott Gamm reports from New York.

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