Analysts expect next fall in oil prices

Oil&Gas Materials 11 June 2009 12:03 (UTC +04:00)

Azerbaijan, Baku, June 10 / Trend , A. Badalova/  

World oil prices will fall again following ongoing rise, Capital Economics analysts said.

"Following a peak of around $75 p/b later this summer, we expect the price of crude oil to ease back to $50 p/b during 2010," the British company said.

Prices on WTI exceeded $70 per barrel for the first time in seven months. As a result of trades on the New York Stock Exchange, prices on WTI futures increased by $1.92 to $70.01 per barrel. In London, Brent futures prices jumped to $1.74 to $69.62 per barrel. Rising oil prices was partly due to weakening in positions of the U.S. dollar on global currency market.

Analysts say oil prices will rise on the backdrop of depreciating U.S. dollar and expectation of the world economy recovery.

According to Capital Economics forecasts, , the price of Brent crude oil grades will be $75 per barrel in the third quarter of this year and $60 per barrel in the fourth quarter. "During 2010, the price will remain at $50 per barrel."

According to the forecasts of the United States Energy Information Administration (EIA), the average price of WTI will be $67 per barrel in the second half of 2009, which is $16 above the average price for the first half of this year.

"Rising oil prices in May was due to expectations for the recovery of world economy and increased demand for fuel, the EIA report says. The weakening of the dollar means that business activity in regions such as Asia is higher than anticipated, and this in turn will have increased influence on oil prices," the company said.

However, the report said reducing risks such as continuing weak demand and high excess production capacity in OPEC countries may limit the rise in oil prices, especially if the recovery of the world economy will slow down or will be weaker than expected.

According to the EIA forecasts, the price on WTI will average $58.7 per barrel and $67.42 dollars per barrel in 2010.

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