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Analysts: Oil prices to fall after Libyan crisis

Oil&Gas Materials 5 May 2011 17:21 (UTC +04:00)

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

Oil prices on the world markets will dramatically fall by late 2011 after the crisis in Libya, analysts at Britain's Capital Economics.

The analysts' report reads that the ongoing civil war in Libya and unrest elsewhere in the Middle East has added a risk premium of around $30 to a barrel of crude.

Nevertheless, analysts expect the fall in risk premium as the weakening of the crisis situation in Libya. Regarding the Al-Qaeda's leader's murder, the experts believe the death of Osama Bin Laden will probably not be a decisive factor for oil markets.

Bin Laden was killed by the US special forces at a compound in the Abbottabad town, 50 miles from Islamabad, on May 2. The news led to a significant drop in oil prices.

The analysts predict the price for U.S. WTI oil at $80 per barrel in late 2011 and for the North Sea Brent at $85 per barrel.

The price of Brent will drop to $ 80 per barrel by the first quarter of 2012, while to $75 per barrel in the fourth. The price of WTI will be $ 75 per barrel in late 2012.

Following the auction on Wednesday, May 4, the June futures price for WTI fell by $1.81 to $109.24 per barrel on the New York Mercantile Exchange.

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