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Global Oil Market Report:Â Price; Supply and Demand; Products
Business Monitor International, July 2011, Pages: 17
Price Correction In H2 In H111, OPEC Basket averaged around US$106/bbl, while Brent crude averaged around US$111/bbl. We twice revised our price forecasts in the period, once in March and again in May. Our most recent price forecast was for Brent to average US$106/bbl over the course of 2011 with OPEC Basket averaging US$101.90/bbl.
WTI, meanwhile, will continue to be weighed down by plentiful stored crude volumes at Cushing, Oklahoma and weak economic sentiment in the US. We see WTI averaging US$95.30/bbl. OPEC Basket and Brent would have to average US$96.83/bbl and US$100.84/ bbl respectively for the rest of 2011 in order to match our forecasts for the year.
We maintain our view of a downward price correction in H211, owing to a combination of several factors. The US economic recovery remains weak and tentative, and talk grows of a second release of crude oil and refined products from IEA stockpiles in order to force down prices. Saudi Arabia, the UAE and Kuwait have all increased oil production. Furthermore, the end of the second phase of quantitative easing in the US could have a bullish effect on the US dollar, in which much of the global oil trade is priced. We believe, therefore, that the stars are aligning for a downward price movement.
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