Western analysts make oil price forecasts for 2010-2011

Oil&Gas Materials 5 July 2010 13:00 (UTC +04:00)

Azerbaijan, Baku, July 5 / Trend A.Badalova /

World oil prices continued their negative trend last week. Oil prices have dropped 17 percent since early May on the backdrop of financial crises in the euro zone and a strengthening dollar.

Yield negative macroeconomic data in the United States was a major factor in the drop in oil prices, and raised fears about a slowing global economic recovery.

Western analysts have lowered their forecasts on oil prices amid continuing concerns about the global - and specifically European - economic situation. Nevertheless, according to analysts, oil prices will likely be higher than the current level.

One of the largest U.S. banks JP Morgan lowered its forecasts on U.S. WTI crude from $88 to $81.75 per barrel and on North Sea crude Brent from $88.6 to $82.25 per barrel. The analysts predict WTI will reach $85 per barrel and Brent $94 per barrel in the third and fourth quarters of 2010. They forecast the average price on WTI at $90 a barrel and Brent at $92 per barrel next year.

Analysts at the U.S. bank Goldman Sachs also lowered their WTI price forecasts from $96 to $87 per barrel in the third quarter. The major reason was concerns about the economic situation in Europe and a possible economic slowdown in China. The price on Brent crude also decreased to $85.5 per barrel.

According to the U.S. State Energy Information Administration (EIA), WTI will hit $79 per barrel this year and $83 per barrel next year, which is $3 per barrel lower than the forecasts made earlier. The EIA expects WTI prices to reach $84 per barrel by late 2011.

Meanwhile, European analysts predict a further decline in oil prices this year.

According to Economic Research Capital Economics, the average price on Brent will reach $70 per barrel in the third quarter of 2010 and drop to $60 per barrel in the fourth quarter. Prices will reach $60 per barrel in 2011, the firm's analysts forecast.

The German Deutsche Bank expects price drops in the third quarter to $65 per barrel. The bank predicts the average price as reaching $80 per barrel in 2011.

Forecasts on World Oil Prices in 2010-2011 (in $ / bbl.)



JP Morgan

81,75 (W)

82,25 (B)

85 (W) (III and IV quarters)

94 (B) (III quarter)

93 (B) (IV quarter)

90 (W)

92 (B)

Goldman Sachs

87 (W) (III quarter)

85,5 (B) (III quarter)



79 (W)

83 (W)

84 (W) (end of the year)

Capital Economics

70 (B) (III quarter)

60 (B) (IV quarter)

60 (B)

60 (B) (I quarter)

Deutsche Bank

65 (III quarter)



B - Brent

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