Oil prices may significantly fall against backdrop of economic fears

Oil&Gas Materials 17 August 2011 15:59 (UTC +04:00)

Azerbaijan, Baku, Aug.17 / Trend, A. Badalova /

There is a significant downside risk for oil prices if economic and financial market concerns become more widespread or take hold.

As U.S. Energy Information Administration's (EIA) analyst Neil Gamson wrote Trend in an e-mail, market expectations for extended weaker prices will continue through the end of next year.

Gamson said there is uncertainty in the petroleum markets.

He said the recent drop in prices is a result of downward revisions to the first half of the U.S. GDP.

The WTI prices fell dramatically to $86.63 per barrel in early August after a growth of more than $100 per barrel in late July.

The Brent price dropped almost $10 per barrel from $107.64 per barrel in early month.
The EIA forecasts world economic growth at 3.4 and 4.1 percent in 2011 and 2012. The U.S. real GDP will grow by 2.4 percent this year and 2.6 percent next year.

As a result of trades on Tuesday, Aug.16, WTI price on the New York Mercantile Exchange fell by $1.23 to $109.47 per barrel. On the London Stock Exchange Brent price fell by $0.44 to $109.47 per barrel.

According to the EIA, the average WTI price in 2011 will hit $95.71 per barrel.