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12/27/2012 8:34:33 PM
Brent crude is poised to trade above $100 a barrel for a third consecutive year in 2013 as tension in the Middle East threatens to disrupt supply and global demand is buoyed by Chinese imports, Bloomberg reported.
Oil will average $110 next year, according to the median of 30 forecasts compiled by Bloomberg, compared with about $111.68 a barrel so far in 2012. Brent is more likely to overshoot the 2013 median than miss it as Iran spars with the west over its nuclear program and the conflict in Syria deepens, Morgan Stanley and UBS AG said.
"Risks are skewed to the upside, related to still-high risks of escalation or confrontation over Iran and deterioration in Syria," said Julius Walker, global energy markets strategist at UBS Securities LLC in New York, who predicts Brent will average $110 next year. "The biggest possible surprise for markets could be stronger-than-expected oil-demand growth."
Rising prices may pose a barrier to a recovery in the global economy amid Europe's sovereign debt crisis, U.S. budget disputes and signs of slowing growth in Asia. Record revenue for oil producers helped ensure supply stability this year, encouraging Saudi Arabia to pump at its highest rate in three decades, while financing shale projects in the U.S. that fostered the nation's biggest production increase in 50 years.