Commodities guru Bill O'Neill says crude oil has bottomed out

Bill O'Neill, former director of commodities research at Merrill Lynch,  has said in a recent interview that crude oil prices have bottomed out, and that he expects a desultory recovery in prices from the third quarter of 2012 to the first quarter of next year.

In an interview with Kathleen Hays on Bloomberg, O'Neill said that crude oil has hit a bottom, with the market overestimating the slow down in China.

"As far as China is concerned, I don't think things are bad as they look.When I look at the import and export data for commodities, I look at things like copper, I talk to dealers in London and things like that, I see demand as being I think a little bit better for some of these markets for China than the consensus gives it credit for.”

“Our view at Logic is that by the third quarter and going into the first quarter of next year we’ll start to see the demand patterns improve, we’ll start to see a little better economic picture. It’s going to be grinding and slow, it’s not going to be a rocket type situation where prices suddenly reverse. But I think we’re getting toward the end and then you’ll see better demand I think for industrial commodities in general.”

According to O'Neill, oil prices will remain where they are or be  five dollars higher by the end of the year, and "will slowly, gradually and irregularly trend higher."