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29 February 2024

Poll: Oil's rally to continue despite US slowdown

By Agencies


Oil's record rally will continue into next year with prices averaging above $77 a barrel as tight Opec supplies and Middle East tensions outweigh a slowing United States economy, a Reuters poll showed on Friday.
The monthly survey of 36 analysts put the consensus forecast for US crude futures in 2008 at a record average of $77.62 a barrel, up $3.19 from last month's poll. The average price for oil so far this year is $71.76.
"Judging by Opec's unwillingness to advocate an increase in output after crude oil traded at $99 a barrel, it looks like high oil prices are here to stay," said Merrill Lynch in a research report.
The Organization of the Petroleum Exporting Countries agreed on December 5 to hold output steady, rebuffing calls from consumer countries for more oil to ease prices that hit a lifetime peak of $99.29 on November 21.

Opec, source of more than a third of the world's petroleum, has capped its supplies partly due to fears global oil demand will slow should the US economy weaken further.
But the International Energy Agency has taken a different view, saying red-hot demand in China, India and the Middle East will more than offset any slowdown from the world's largest energy consumer.
"The Opec decision is now limiting actual supplies coming to the market while the anticipated weakness in economic and oil demand growth remains a forecast, with current oil market fundamentals showing no signs of significant weakness yet," said Goldman Sachs earlier this month.
Goldman, the most active investment bank in energy markets, is also the most bullish in the poll, forecasting average 2008 US oil prices above $95. It said prices could reach $105 by the end of next year.
A battered US dollar, cold winter weather, and a series of supply disruptions have helped keep prices above $90 for most of the fourth quarter.
Analysts forecast London Brent crude to average $76.49 a barrel, up $3.61 from last month's poll.
Although the Reuters poll showed oil will peak next year, analysts remained bullish in the long term with US prices expected to above $70 through 2010.
The median forecast for U.S. oil prices in 2010 rose to $70.60 a barrel, up $2.34 from November's poll.
Reuters monitors price forecasts by analysts, consultants and government bodies. (REUTERS)