Roubini says oil, gold look overpriced

(Reuters) - Oil and gold are overvalued at current prices, which do not reflecting their market fundamentals, economist Nouriel Roubini said at the Reuters Investment Outlook Summit on Tuesday.

Roubini, who is known for having predicted the financial crisis that rocked the global economy in the past two years, painted an economic backdrop of deflationary risks and warned that if oil keeps climbing toward the $100 level it would deal an "economic shock" similar to the one last seen in 2008.

The recent rally in oil, which sent prices to an eight-month high above $73 per barrel, was "too high too soon," Roubini told the Reuters Investment Outlook Summit in New York.

Keep reading... http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55F4YM20090616

Oil rises to $72

(Reuters) - Oil firmed to $72 a barrel on Thursday after the International Energy Agency raised its estimate for 2009 oil demand, adding to signs the fall in consumption may have bottomed out.

World oil demand will contract by less than previously expected this year, the International Energy Agency said as it raised its 2009 forecast for the first time since August 2008

U.S. crude rose 71 cents to $72.04 a barrel by 1105 GMT (7:05 a.m. EDT), a near eight-month high. Brent crude gained 50 cents to $71.30.

Falling inventories in top oil consumer the United States also supported prices.

IEA Revises 2009 Oil Demand

The International Energy Agency has slashed its oil demand projections. It sees global demand at 84.7 million barrels per day, a 1 million barrel per day drop from the year before.

Taking cues from the slashed GDP figures from the IMF on global growth which is expected to be just 0.5%. Developing nations have significantly slowed their demand for oil, and according to Bloomberg, the IEA described Asia and Russia as "particularly grim."

The IEA did not change it's 2008 demand estimate, which was down 0.4% compared to 2007. If this estimate holds and demand drops again for 2008, it will be the first time the world has experienced back to back years of oil decline since 1982/83.