Merrill Lynch betting on oil trading at $100 in 2010

Merrill Lynch increased its oil price trading forecast for WTI (West Texas Intermediate) and ICE Brent crude oil prices in 2010 to an average $85 a barrel because of rising oil demand, economic stimulus plans and a weak US dollar.

Prices may climb to $100 because of the bullish factors, Francisco Blanch, Merrill’s head of commodities research, said in a report dated Nov. 12. The bank previously estimated that the WTI and Brent grades, the U.S. and U.K. benchmarks, would average $75 a barrel next year.

Economic growth “will lend support to a strong rebound in global oil demand,” Blanch said in the report. “Activity has turned around surprisingly quickly in emerging markets, but fiscal spending programs and very loose monetary policy have also floored the rate of contraction in developed economies.

Merrill Lynch also increased its outlook for global oil demand growth in 2010 by 600,000 barrels to 2 million barrels a day. Crude oil consumption in emerging economies such as China and India will account for most of the gain, climbing by 1.5 million barrels a day, according to the report.

Tags:  2010, brent, ICE, Merrill Lynch, oil price, oil trading, WTI