LONDON: Oil prices are set to remain robust through next year despite the global markets shakedown in recent days, with banks and other institutions trimming their estimates marginally, according to the monthly Dow Jones Newswires oil price survey.
The median US light, sweet crude price in the three months to September, compiled from 26 banks and other institutions, is revised $2 a barrel higher to $72 a barrel against last month’s survey, and trimmed by just 30¢ in the peak oil demand period of October to December, to $66.70 a barrel.
The forecasts, compiled within the last two days, are underpinned by the start of the hurricane season and with long-standing supply fears stemming from oil-rich countries such as Nigeria and Iran firmly intact.
Oil analyst Thina Saltvedt at Norway’s Nordea Bank said: “The supply side is tight and demand will increase in the mid-term. But the turmoil in the US sub-prime and credit markets may cause prices to drop even further in the short run if more news about credit difficulties and liquidity problems are published.”
Edward Morse at Lehman Brothers said he saw the outcome of the hurricane season and the timing of the onset of winter weather in the northern hemisphere as the most important pricing factors over the coming months, though he also considered the next policy meeting of the Organisation of Petroleum Exporting Countries on September 11 as worth monitoring.
Global markets have been roiled this week by concerns over the exposure financial institutions and hedge funds have to US mortgages. Some analysts don’t think oil market fundamentals have changed much despite the turmoil across global markets.
“They haven’t deteriorated. You have an element of short-term weakness that could stem from a weaker economic picture, but oil demand growth is running a lot faster than non-Opec supply growth, and that’s leaving Opec in the driver’s seat,” Harry Tchilinguirian at BNP Paribas said. – Dow Jones Newswires. |
