Analysts forecast oil prices for 2011-2012

Azerbaijan, Baku, Oct.14 / Trend A.Badalova /

Global oil demand concerns have been the main downward factor for oil prices this week. The International Energy Agency, as well as OPEC cut their world oil demand forecast for 2011 and 2012 due to uncertainties in the global economy.

Following trading on Thursday, Oct.13, WTI November futures at NYMEX decreased by $1.34 to $84.23 a barrel. Brent November futures at LSE decreased by $0.25 to $111.11 a barrel.

Oil would need to drop a bit further to offset the other, negative, demand shocks, analysts of the British leading consulting company on economic studies Capital Economics believe.

British analysts forecast Brent prices to be $100 per barrel in the fourth quarter of 2011, $90 per barrel in the first quarter of 2012 and $85 per barrel by the end of next year.

The U.S. investment bank Morgan Stanley cut its Brent price forecast for the next year on the prospects of Libya's supply recovery, as well as the poor world demand perspectives.

According to the latest Morgan Stanley's forecasts, the price for Brent will amount $100 per barrel in 2012 compared to $130 per barrel forecasted previously.

In the first half of 2012 Brent will trade at the range of $85-90 per barrel.

Analysts of the U.S. bank Goldman Sachs, in the contrary, expect tight oil supply for the next year. Therefore, according to analysts' forecast, price for Brent will amount $130 per barrel in 2012.

Barclays Capital investment bank's analysts expect price of Brent to reach $130 per barrel by late 2011.

Another major U.S. investment bank JP Morgan believes that the possible recession could be the main downward factor for oil prices. They believe Brent prices in recession could drop to between $50/bbl and $70/bbl. However, analysts expect that world oil prices could still move higher over the next two years, reaching $130/bbl at the end of 2013.

According to the analysts' forecasts WTI average price will amount $94.12 per barrel in 2011 and $97.5 per barrel in 2012. Brent average price will be $112.4 per barrel in 2011 and $115 per barrel in 2012.

As forecasted by the U.S. Energy Information Agency (EIA), the average price of WTI will reach $92.36 per barrel in 2011, and then fell to $88 per barrel in 2012.

Oil price forecast for 2011-2012 (in $/barrel)

W - WTI

B - Brent