Although the United States passed a broader bailout bill last week, it does not eliminate investors’ concerns about the global economic outlook. Coupled with the deteriorating situation in Europe, crude oil prices fell by 12% last week to $93.88/. Barrel, approaching $90 again.
"Crude oil prices will fall next year, but the big bull market is not over," said Francisco Blanch, Merrill's director of global commodities research. In the Energy Weekly report released last week, Merrill Lynch downgraded the average price of WTI crude oil next year from US$107/barrel to US$90/barrel, and said that if the global economy is in a serious recession (although Merrill Lynch analysts believe this The probability is very small. The price of oil may fall to $50/barrel.
The U.S. Congress rejected a $700 billion bailout bill last Monday. The day's oil price plummeted by 10.5 U.S. dollars. Even if the Congress finally approved a more comprehensive bill on Friday, oil prices could not rebound. “Investors eventually discovered that whether or not there is a bailout bill, the economy will fall into recession,†said Xin Chen, a partner at Euroland LP Fund. “The employment data on Friday confirmed this.†The data released on Friday showed The United States lost 159,000 jobs in September.
According to Blanch's forecast, the global demand for crude oil in 2009 will increase by only 400,000 barrels per day, only half of that estimated by Merrill Lynch. Demand weakness will not only occur in OECD countries, but emerging markets are no exception. In his view, high leverage and high oil prices have hurt the global economy, while Blanch, on the other hand, expects OPEC's production capacity to increase substantially in the next 18 months. However, Blanch does not expect the oil price to drop soon. He said that the average WTI crude oil price in the fourth quarter of this year may still be maintained at US$107.
However, the Iranian oil minister is not satisfied with the current oil prices. "For any party, the oil price below $100 is unsustainable, whether it is the supply side or the demand side," he said on Saturday.
Iran has always held a tough point on the issue of oil prices. At the OPEC meeting of oil ministers in September, Iran successfully advocated that all member states pass a decision to reduce production by 500,000 barrels, and the next OPEC ministerial meeting will be held in December.
“Concerns about declining demand are overshadowing the market,†Xin Chen said. “The current situation of oversupply is well-known. To maintain this output is to restore inventory levels, but if prices continue to fall, OPEC will have to act.â€
Blanch also believes that the super-bull market for oil prices does not end there. He believes that the current bailout measures for financial markets will push inflation upwards for a long time to come. Financial turmoil will drive up the cost of capital. Once the economy recovers, oil prices will stabilize. Above $150/barrel.
"Crude oil prices will fall next year, but the big bull market is not over," said Francisco Blanch, Merrill's director of global commodities research. In the Energy Weekly report released last week, Merrill Lynch downgraded the average price of WTI crude oil next year from US$107/barrel to US$90/barrel, and said that if the global economy is in a serious recession (although Merrill Lynch analysts believe this The probability is very small. The price of oil may fall to $50/barrel.
The U.S. Congress rejected a $700 billion bailout bill last Monday. The day's oil price plummeted by 10.5 U.S. dollars. Even if the Congress finally approved a more comprehensive bill on Friday, oil prices could not rebound. “Investors eventually discovered that whether or not there is a bailout bill, the economy will fall into recession,†said Xin Chen, a partner at Euroland LP Fund. “The employment data on Friday confirmed this.†The data released on Friday showed The United States lost 159,000 jobs in September.
According to Blanch's forecast, the global demand for crude oil in 2009 will increase by only 400,000 barrels per day, only half of that estimated by Merrill Lynch. Demand weakness will not only occur in OECD countries, but emerging markets are no exception. In his view, high leverage and high oil prices have hurt the global economy, while Blanch, on the other hand, expects OPEC's production capacity to increase substantially in the next 18 months. However, Blanch does not expect the oil price to drop soon. He said that the average WTI crude oil price in the fourth quarter of this year may still be maintained at US$107.
However, the Iranian oil minister is not satisfied with the current oil prices. "For any party, the oil price below $100 is unsustainable, whether it is the supply side or the demand side," he said on Saturday.
Iran has always held a tough point on the issue of oil prices. At the OPEC meeting of oil ministers in September, Iran successfully advocated that all member states pass a decision to reduce production by 500,000 barrels, and the next OPEC ministerial meeting will be held in December.
“Concerns about declining demand are overshadowing the market,†Xin Chen said. “The current situation of oversupply is well-known. To maintain this output is to restore inventory levels, but if prices continue to fall, OPEC will have to act.â€
Blanch also believes that the super-bull market for oil prices does not end there. He believes that the current bailout measures for financial markets will push inflation upwards for a long time to come. Financial turmoil will drive up the cost of capital. Once the economy recovers, oil prices will stabilize. Above $150/barrel.
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