International analysts not believe in oil prices growth by late 2010
Azerbaijan, Baku, May 26 / Trend, A.Badalova /
World oil prices on the background of the crisis in the Euro zone over the past month have sharply decreased. Oil, which at the beginning of the month was sold at $85 per barrel, now decreased to $70 per barrel. If earlier, analysts expected reaching or even exceeding the price of oil in rate $100 per barrel by the end of 2010, now on the background of negative news from Europe fears regarding further drop in prices compared to the indicated period exist.
International analysts do not expect a significant increase in world oil prices in 2010, and they believe that the world economy will remain the main factor affecting the dynamics of prices in the short term.
American scientist, President of Company Pioneer Astronautics Robert Zubrin believes that, oil prices may sag somewhat on expectations of a downtourn, but not much. According to him, oil prices by the end of this year will be in the current range (about $70 per barrel), and move higher next year as economic recovery moves forward.
As a result of trading on Monday, May 24 at the New York Mercantile Exchange price of June futures on the U.S. WTI light oil increased by $0.17 to $70.21 per barrel. June futures for North Sea Brent oil in London Stock Exchange decreased by $0.51 to $71.17 per barrel.
The sharp drop in oil prices has caused fears about the possible extraordinary meeting of OPEC. According to the cartel, oil prices at $ 70 are acceptable. However, given the continuing trend of prices, their decrease to $60 per barrel, which will be alarm signal for OPEC is not excluded. According to the head of Libya's National Oil Company Shokri Ghanem, on the background of level of oil prices at $60 per barrel the cartel must convene an extraordinary meeting. But on the background of level of oil prices at $100 per barrel, the cartel will take actions, he said.
Today, oil production quotas set by OPEC hits 24.84 million barrels a day. At the last meeting in March, the organization decided to remain quotas unchanged.
According to Zubin, possible reduction in oil production of OPEC will have negative consequences.
"If OPEC tries to boost prices by cutting output now they may abort the recovery. This will hurt everyone in the long run," Zubrin told Trend via e-mail.
According to Todd Wynn, Climate change and energy policy analyst of the American Strategic Institute Cascade also does not exclude the possibility of holding an extraordinary meeting of OPEC, however, believes thateconomic factors have a strong effect on prices that could overwhelm OPEC decision making.
Wynn believes that oil prices will remain stagnant because of the situation in Europe and the continued economic recession around the globe.
"Economic recovery could help rebound prices. Unfortunately, I do not see a robust economic recovery in our near future," Wynn told Trend.
According to forecasts of the U.S. Energy Information Administration (EIA), the price of U.S. light oil by the end of 2010 will amount $82 per barrel.
The most important downside risk to this forecast is lower-than-expected economic growth, Neil Gamson, analyst of theEIA told Trend.
According to the EIA's forecast, the world economy will grow by 3.6 per cent in 2010 and by 3.7 percent - in 2011.
Analysts one of Britain's Leading Independent Economic Research Consultancy Capital Economics forecast the fall by the end of 2010 in oil prices to $60 per barrel. In the third quarter, the price of North Sea oil Brent, according to forecasts of analysts, will amount to $70 per barrel, in the fourth quarter - will decrease to $ 60 per barrel and remain at that level in 2011.
According to British analysts, the main factors of the fall in prices during the last month are the crisis in Europe and dollar's volatility.