Oil price forecasts for 2011-2012

Azerbaijan, Baku, Aug.23 / Trend, A.Badalova /

Concerns over the world economy remain the main downward factor for oil prices. Last week's negative macroeconomic data from the U.S. and the eurozone lead to a price drop.
Following trading on Friday, Aug.19, WTI September futures at NYMEX decreased by $0.12 to $82.26 a barrel. Brent October futures at LSE increased by $1.76 to $108.75 a barrel.

Against the background of negative expectations for the world economy, Western analysts expect further falls in oil prices.

As forecasted by analysts of the British leading consulting company on economic studies Capital Economics, the oil price of North Sea Brent will reach $85 per barrel in 2012; WTI oil prices will reach $80 per barrel.

According to British analysts, a drop in prices will likely contribute to the resolution of the Libyan crisis and the fragile state of the world economy.

British analysts forecast Brent prices to be $100 per barrel in the third quarter of 2011 and $85 per barrel by the end of the year.

Morgan Stanley analysts (a U.S. investment bank) lowered their forecast for Brent prices in 2012 from $113 to $103 per barrel. Forecasts reflect the bank's expectations about world growth in 2012, which predict a drop to 3.8 percent, from 4.5 percent.
Analysts of the U.S. bank Goldman Sachs left forecasts for the price of oil unchanged. According to the U.S. bank analysts' expectations, WTI prices will reach $130 per barrel in 2012.
Barclays Capital investment bank's analysts believe that the price of Brent oil will reach $100-$130 per barrel by late 2011. Growth of demand for oil in developing countries will support the prices.

As forecasted by the U.S. Energy Information Agency (EIA), the average price of WTI will reach $96 per barrel in 2011, and $101 per barrel in 2012.

JP Morgan bank analysts (another major U.S. investment bank) forecast the average price of Brent oil to be $110 per barrel in the third quarter of 2011 and $115 per barrel in the fourth quarter. Following this year, analysts forecast the price of North Sea oil to be $112 per barrel.

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

W - WTI

B - Brent