Latest Brent Oil Price

In London, Brent crude oil futures for February 2012 delivery was trading at $107.90 a barrel, 08.03 GMT this morning on the ICE Futures Exchange.

The European oil contract closed yesterday’s trading session at $107.42 a barrel, or 1.7 percent lower on the day.

Brent Oil Price 2011

Brent crude oil prices grew from around $94 a barrel at the start of 2011 to around $108 now. The Brent oil contract spent most of the year within the $100 to $120 range, spiking to $126 in April.

Brent Oil Price Forecast 2012

Marco Dunand, chief executive of Mercuria Energy Trading, said world oil supplies were tight and this would probably keep prompt prices for ICE Brent above forward barrels with the market in backwardation for the foreseeable future.

“We see $100 as a floor for Brent going into next year unless OPEC decides to change their policy and supply extra barrels to the market. We anticipate a situation where the market will remain reasonably tight for a while.” Dunand said.

Dunand predicts that a major geopolitical shock, such as a war between Iran and the west which could close the Hormuz Strait in the Middle East Gulf, would push oil prices up very sharply.

“With the situation in the Middle East, there are risks to the upside. The market has already started pricing in some sort of Iranian tension or conflict, but obviously the market would have a long way to go if there was a serious conflict.”

Europe – Middle East – America

The risk of reduced Iranian supply has offset demand fears arising from the deepening crisis that shadows Europe, which threatens to knock global economic growth and send the west back into another big slump.

BP chief Bob Dudley warned today that the fragile economic recovery could be negatively affected by high oil prices, especially in America.

Speaking at the world’s largest oil and gas producers gathered in Qatar, Mr Dudley said: “It is important in the current situation of a fragile global economy and I think right now we are probably walking a fine line.”

“It is impossible to say what price exactly will affect the economic recovery but we do know which regions will be affected most.” he said, adding that the United States was most vulnerable because of its slim fuel tax buffer to soften the blow of rising oil prices through pump price tax cuts.

Meanwhile, banking giant Goldman Sachs senior commodities analyst Allison Nathan said the bank forecasts Brent Crude oil prices to reach $130 within the next year.

Speaking at a press briefing in Singapore she said the growth in the developed economies will be weak but the emerging economies are expected to make up for the weakness in demand for commodities and oil prices.

Citigroup analysts have upped their forecast that Brent crude oil prices should trade in a range of $100 to $120 a barrel and to average $110 for 2012, up from their previous forecast of $86 per barrel for Brent, which was set in August this year.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2012 delivery was trading at $109.96 a barrel, 07.55 GMT this morning on the ICE Futures Exchange.

ICE Brent crude oil futures closed Thursday’s trading session at $108.92 a barrel, or 1.5 percent lower on the day.

Brent Oil Price – 2012

Marco Dunand, chief executive of Mercuria Energy Trading, said world oil supplies were tight and this would probably keep prompt prices for ICE Brent above forward barrels with the market in backwardation for the foreseeable future.

“We see $100 as a floor for Brent going into next year unless OPEC decides to change their policy and supply extra barrels to the market. We anticipate a situation where the market will remain reasonably tight for a while.” Dunand said.

Dunand predicts that a major geopolitical shock, such as a war between Iran and the west which could close the Hormuz Strait in the Middle East Gulf, would push oil prices up very sharply.

“With the situation in the Middle East, there are risks to the upside. The market has already started pricing in some sort of Iranian tension or conflict, but obviously the market would have a long way to go if there was a serious conflict.”

“If there were to be a general conflict and the Strait of Hormuz were to be closed, not something we are expecting, it wouldn’t be unrealistic to see the market to go to $130 or $150 per barrel. But I see the chance of that being reasonably low.”

Headquartered in Geneva, Switzerland, Mercuria is one of the top five energy traders with a turnover of around $75 billion, moving almost 120 million tonnes of oil, coal and gas a year.

Goldman Sachs Oil Price Forecast 2012/2013

Meanwhile, banking giant Goldman Sachs introduced its 2013 Brent oil price forecast at $130 a barrel yesterday, saying that crude oil prices will continue to rise in order to slow demand growth, even in a relatively poor economic growth environment.

Goldman Sachs introduced a 2013 WTI price forecast of $126 a barrel, saying the WTI to Brent oil price spread will likely compress further as the Seaway pipeline increases capacity to 400,000 barrels per day.

Goldman Sachs maintained its 2012 price forecast of $120 a barrel for ICE Brent oil futures and $112.50 a barrel for NYMEX WTI oil futures.

“We continue to view the crude oil market as navigating between the currently tight physical oil markets and the threat that the European debt crisis could trigger a global economic recession in the near future, which would lead to a sharp drop in oil demand.” Goldman Sachs analysts said in a note.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading at $110.49 a barrel, 07.35 GMT this morning on the ICE Futures Exchange. The European contract ended Wednesday’s session at $109.20, or lower by 1.6 percent.

Euro Debt Deal

Eurozone leaders said on Thursday they had reached agreement after late night talks on measures to tackle the debt crisis. The deal calls for banks to accept a 50 percent losses on Greek debt and increases the firepower of the rescue fund to about €1 trillion.

“I attribute the edging up of oil futures to some apparent progress in the discussions in Europe regarding the European debt crisis,” said Victor Shum of Purvin & Gertz.

“If they extend the EFSF, that’s obviously positive and will reduce some of the risks that we have in the European market. Anything they can do to create consumer power and growth would translate into better commodities prices.” said Jeremy Friesen, Commodity Strategist at Societe Generale.

However many analysts remain concerned that the details of the deal remain patchy at best and markets remain unsettled.

“The commodity market is cheering it at the moment but they shouldn’t be. Higher commodity prices will make it a lot harder for these economies to try and get out of the problems they’re in. It’s a knee jerk reaction to buy commodities when the dollar goes down, that’s what we’re seeing, but in my mind it will eventually defeat the purpose if the dollar continues to weaken.” according to Jonathan Barratt of Commodity Broking Services.

Brent Oil Price Forecast

“Global oil supply is extraordinarily tight, creating the risk that prices will exceed forecasts.” according to Goldman Sachs.

Restrictions on output growth in Libya and Iraq, two of the main sources of additional production, will strain the availability of oil next year, Jeff Currie, Goldman’s head of commodities research, said yesterday in London. Brent oil prices may surpass the bank’s 2012 average estimate of $120 a barrel, he said.

Oil Price Forecast – 2013

The bank forecasts the price of Europe’s Brent oil for 2013 to average out at $121.25 per barrel and forecasts the 2013 average WTI oil price at $114.25 per barrel.

“Our analysis suggests that supply constraints will again be reached by the end of 2013, driving a quarterly rise in our ICE Brent price forecast to $130 per barel.” it said.

Oil Price Forecast – 2012

JP Morgan has maintained its price projection of $115 a barrel for Brent crude oil, and $97.50 a barrel for WTI through 2012.

Earlier this week, Goldman Sachs cut its 2012 Brent crude oil price forecast, on growing worries that the European financial crisis would restrain economic growth and curb global fuel demand.

Goldman Sachs trimmed its 2012 Brent oil price estimate to $120 a barrel from $130 and cut its forecast for US WTI crude oil price to $109 from $123.50.

Goldman Sachs had the highest Brent 2012 forecast of $130 a barrel a recent monthly oil poll, well above an average of $106.80 a barrel expected in 2012.

JP Morgan – Top Oil Stock Picks

Meanwhile, JP Morgan has adopted a more positive stance toward the major US oil producers sector, while also upgrading several stocks within the sector in a research note released on Thursday.

Within the integrated oils sector, JP Morgan’s top picks are Nexen, Hess, Talisman Energy and Occidental Petroleum. The bank’s analysts think these companies offer the most attractive combinations of upside to price targets, downside protection, upcoming catalysts and growth in production.

“We stress that we would not short these names, but we would lock in recent outperformance, as we believe they have less to offer than the peers in terms of share price performance, underlying growth and valuations appeal in the near term.” the report said.

Brent Oil Futures – Closing Price

ICE Brent crude oil futures for November 2011 delivery ended the week’s trading session at $102.23 a barrel on the ICE Futures Exchange, $1.73 lower than last week’s closing price of $103.96 a barrel. The contract traded 1.7 percent lower yesterday.

Economic Concerns Hit Markets

Worries about a Greek default, slow growth in China and an anemic US economy saw most stock markets sell off again on Friday and oil prices followed the markets lower again. However some analysts are not so bearish for the short term price of oil futures.

“Crude oil has been holding up quite well compared with the other asset classes such as equities. Sentiment is negative but demand is still there, especially coming from the emerging markets, from China and India.” said Ker Chung Yang, a commodities analyst at Phillip Futures, Singapore.

China’s manufactuing sector, contracting for a third consecutive month in September prompting worries about the health of the world’s second largest economy.

Brent crude oil prices are down over 10 percent for September, and the Brent contract last traded at $102 a barrel way back in February.

Brent Oil Price Forecast

Morgan Stanley cut its Brent forecast for next year to $100, down from $130 previously because of increasing supply and a weaker oil demand outlook.

Production capacity in OPEC will climb almost 800,000 barrels a day in 2012, led by the return of Libyan fields, said Hussein Allidina, the head of commodities research at Morgan Stanley, New York. Non OPEC crude oil output will rise by 225,000 barrels per day.

Slowing global economic growth should weigh on crude oil demand, with consumption forecast to increase by 600,000 barrels per day next year, down from a gain of 950,000 bpd this year and 2.7 million bpd last year.

Risk aversion should drive strength in the US dollar, which will be a headwind for oil prices, Mr Allidina said. “Brent has experienced significant sell offs this summer.”

Brent oil prices have swung sharply over the past few weeks, affected by volatility in global stock markets. Investors and traders are increasingly worried that the global economy is headed back into a recession amid staggering debt concerns in Europe.