Global economy to deteriorate: JP Morgan

Oil&Gas Materials 6 February 2009 14:35 (UTC +04:00)
Global economy to deteriorate: JP Morgan

Azerbaijan, Baku, Feb. 6 / Trend , A.Badalova /

The biggest change in global oil prices still lies ahead. The economic environment is rapidly deteriorating, JP Morgan reported.

In the first quarter of 2009, global GDP growth projections decreased to -4.8 percent with second quarter expectations at -0.1 percent. The bank's global financial forecast for 2009 decreased to -1.7 percent.

"We are positive in terms of crude in the short term, but longer-term pressures are emerging," JP Morgan said in a report on OPEC activities to balance the oil market.

At its regular meeting, OPEC may cut quotas on production to stabilize oil prices.

The meeting will be held in Vienna on March 15.

Earlier OPEC President Jose Maria Botelho de Vasconcelos said if Brent prices drop less than $40 per barrel, then the meeting will be premature. At its December meeting, OPEC cut oil production by 2.2 million barrels per day. Since early September, oil production has been cut by 4.2 million barrels per day.

"If the noises are right, then OPEC output will be lower in February. But we suspect that in some cases output is lower because demand is not there. If demand picks up, so too will supply," the report said.

JP Morgan said the global oil demand in 2009 will decrease by one million barrels per day to 84.6 million.

The average WTI prices for 2009 are $43.25 per barrel.

In 2009, Brent prices are $43.75 per barrel.

As for yesterday's auction at the London Stock Exchange, the cost of March contracts on Brent increased by $2.31 to $46.46 per barrel. The cost of March futures of WTI on the New York Stock Exchange increased by $0.85 to $41.17 per barrel.

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