U.S bank reduces forecasts on world oil prices

Azerbaijan, Baku, July 1 / Trend A. Badalova /

One of the largest U.S. bank JP Morgan has lowered forecasts for world oil prices in 2010 amid expectations of stabilizing U.S. dollar against the euro. According to new projections of the bank, the price for U.S. crude oil WTI this year will amount to $81.75 per barrel compared to $ 88 per barrel, the bank forecasted earlier.

The price for North Sea Brent crude oil for this year also lowered by the bank from $88.6 per barrel to $82.25 per barrel.

According to the monthly report of JP Morgan on the oil market, the price for WTI will be $85 a barrel in the third and fourth quarters of 2010, Brent - $86 a barrel, analysts said.

Forecasts of JP Morgan analysts on oil prices for 2011 remain unchanged - $90 per barrel for WTI and $92 dollars per barrel - for Brent. Analysts predict the price for WTI at $ 95 per barrel, Brent - $97 per barrel in the fourth quarter of next year.

Oil prices on world markets show the trend of falling for the third day since the beginning of the week. The main reason was the U.S. Department of Energy's data on the growth of stocks of oil products, as well as concerns about the continued low demand for oil. As a result of trading on Wednesday, June 30 the price for August futures for WTI on the New York Exchange fell by $0.31 up to $75.63 per barrel. Price for August futures for Brent reduced by $0.43 up to $75.01 per barrel on the London Stock Exchange.

World oil demand

JP Morgan analysts forecast an increase in global oil demand at $2.1 per barrel up to $86.8 per barrel in 2010. Previously, bank analysts predicted world oil demand at $86.4 per barrel this year.

Global demand will increase by $1.6 per barrel up to $88.4 per barrel in 2011.

Of the total oil demand in 2010, about 45.7 million barrels a day will fall to OECD countries (the Organization for Economic Cooperation and Development), 41 million barrels per day - countries non-members of the organization.

Oil demand in the OECD increased by 0.2 million barrels per day up to 45.7 million barrels per day, in countries non-members of the organization - 1,6 million barrels up to 42.6 million barrels per day in 2011.

Demand for oil in Asian countries will hit 27.1 million barrels per day in 2010 and 27.8 million barrels per day in 2011, analysts said. Most demand among Asian countries will fall to China - 9 million barrels a day this year and 9.4 million barrels a day next year.

OPEC Oil Supply

JP Morgan analysts forecast an increase of world oil supply by 2 million barrels per day up to 86.8 and 88.8 million barrels per day in 2010 and 2011, respectively.

Of the total world oil supply in 2010, about 29,2 million barrels a day or 0,6 million barrels a day more than the amount in 2009 will fall to OPEC. According to the forecasts of the bank, the highest level of oil cartel this year will occur in the fourth quarter - 29.5 million barrels per day.

The bank forecasts an increase in OPEC supply at 1.8 million barrels up to 31 million barrels per day in 2011. The level of supply will be 30.5 million barrels a day in the first and second quarters of next year,  31.5 million barrels - in the third and fourth quarters.

JP Morgan analysts believe that there will not be significant growth in OPEC supplies soon, given the fact that a majority of the cartel members are satisfied with the current level of oil production and prices.

Deliveries of oil by countries-non OPEC members

This month analysts of the bank raised the forecasts of oil supplies to the countries non-OPEC members this year from 49.9 up to 50.1 million barrels per day, which is 0.9 million barrels per day more than the volume of deliveries last year. The bank analysts predict a reduction in oil supply by these countries by 0.3 million barrels up to 49.8 million barrels per day in 2011.

According to JP Morgan, oil production by countries non OPEC members reduced in May by 245,000 barrels per day up to 40.7 million barrels per day. Oil production in the former Soviet Union in May increased by 0,116 million barrels per day up to 12.542 million barrels per day.

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