Analysts' oil price forecasts for 2012

Oil&Gas Materials 27 January 2012 18:12 (UTC +04:00)

Azerbaijan, Baku, Jan. 27 /Trend A.Badalova/

Concerns over the disruption of Iranian oil export due to U.S and EU sanctions remain to be the main driver for world oil prices.

Following the auction on January 26, the price on Brent futures for March increased by $1.14 a barrel up to $110.95 per barrel. The cost of WTI futures for March on the New York Mercantile Exchange rose by $0.3 up to $99.7 per barrel.

This week's main event was the EU ban on oil imports from Iran and coming to an agreement to freeze the assets of Iran's central bank, joining the U.S in a new round of measures. The latest sanctions by the European Union will be fully enforced by July 1.

International Monetary Fund (IMF) predicted this week that world oil prices could rise by 30 percent if Iran stops oil export in response to the U.S. and EU sanctions.

The U.S. investment bank Morgan Stanley revised up their Brent price forecast by $10 for the first quarter of 2012 on geopolitics risks.

According to Morgan Stanley's bull and bear case scenarios, Brent price will be amount to $125 and $85 accordingly.

In 2012 Morgan Stanley predicts average Brent price at $100 per barrel.

Analysts of the U.S. bank Goldman Sachs also revised up their forecasts for WTI from $104.5 per barrel to $113 per barrel in the first quarter of 2012. The revision was made on the growth of concerns around Iranian situation. Brent price is forecasted at $120 per barrel in the first quarter of the year.

In 2012 the average WTI price is expected by Goldman Sachs at $123.5 per barrel, Brent price - at $127.5 per barrel.

However the analysts of the British leading consulting company on economic studies Capital Economics believe that oil prices will fall further in the light of expectations on high global demand level.

Capital Economics' analysts expect the price of Brent crude to drop back to around $85 per barrel by the end of 2012. In 2013 analysts expect Brent price at $75 per barrel.

Another major U.S. investment bank JP Morgan believes that Brent oil prices are likely to remain at $100-$120 per bbl for most of 2012.

As forecasted by the U.S. Energy Information Agency (EIA), the average price of WTI will average $100.25 per barrel in 2012, and $103.75 per barrel in 2013.

According to the EIA forecasts, the average WTI price will amount to $101 per barrel in the fourth quarter of 2012 and rise to an average of $106 per barrel in the fourth quarter of 2013.

Oil price forecast for 2012 (in $/barrel)


Morgan Stanley

125 (bull scenario) (B)

85 (bear scenario) (B)

100 (average) (B)

100 (B)

Goldman Sachs

123.5 (W)

127.5 (B)

Capital Economics

85 (B)

JP Morgan

100-120 (B)


100.25 (W)

101 (IV quarter)