British analysts expect oil price to finish 2012 below $100/brl
Azerbaijan, Baku, March 27 /Trend A.Badalova/
Word oil prices will fall back and end 2012 below $100 per barrel, leading analysts of the British economic research and consulting company Capital Economics believe.
"Our end-2012 forecast of $85 for Brent does now look ambitious and we will nudge it up shortly, but prices should still end the year below $100," analysts said in their report.
Earlier analysts predicted Brent price at $85 per barrel by the end of 2012 and at $75 per barrel by the end of 2013.
According to the British analysts' estimates, the tensions between the west and Iran have added to global oil prices around $10 per barrel. And this explains around half the $20 increase in the cost of Brent since December, they believe.
"$10 is probably an upper limit on how large the Iranian premium should be, provided that
the tensions do not escalate towards a military conflict," analysts said. They believe that the worst case scenario, which is some form of military conflict that disrupts the flow of oil through the Strait of Hormuz, is unlikely.
At the same time analysts believe that prices could quickly drop by up to $10 if Iran gives some ground on its nuclear programme and tensions ease. And the premium could evaporate sooner if there is an early release of official stocks.
Following the auction on March 26, the price on Brent futures for May increased by $0.52 a barrel up to $125.62 per barrel. The cost of WTI futures for May on the New York Mercantile Exchange increased by $0.16 percent to $107.03 per barrel.