Merrill Lynch expects "robust" demand for energy in 2010
Tom Stundza -- Purchasing, 7/8/2009 2:33:32 PM
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Bank of America Securities-Merrill Lynch has increased its price
forecast for 2009 and 2010 crude oil prices, citing a weaker dollar, a
significant improvement in global liquidity conditions and a slightly
tighter-than-expected global oil market balance. The brokerage expects West
Texas Intermediate (WTI) crude to average $58.50 per barrel (bbl) in 2009, up
from $52 forecast earlier.
This forecast compares with consensus estimates of $55/bbl
in 2009 but all these remain below the new $60 forecast of the Energy
Information Administration, which projects prices "to rise slowly" as economic
conditions gradually improve.
Merrill Lynch analyst Eric Hagen forecasts WTI for 2010 at
$77/bbl, up from $62. The consensus forecast is $66/bbl with the EIA forecast
at $72.
In fact, Hagen
suggests that WTI oil prices may reach $82 by the fourth quarter of 2010 due to
shrinking of spare capacity by the Organization of Petroleum Exporting
Countries (OPEC), limited growth in non-OPEC supply and--the key--a robust
emerging market demand outlook causing more dollars to come into circulation.
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