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Page added on March 15, 2010

Oil trading price predictions for 2010 to 2012

Oil trading price predictions for 2010 to 2012

Oil prices are back on their way up and currently, oil trading prices on global markets have hit highs last week for 2010 for both NYMEX Light crude oil and ICE Brent crude oil futures. So, the golden question is, what’s in store for the rest of the year and what’s the price oil going to be in the future years, 2011 and 2012?

Of course that question is impossible to answer with any accuracy because of poor oil reserve data, the obscure intentions of oil producers and elasticity effects that lead to oil demand destruction or substitution. However, it is possible to do simple minded extrapolations of recent price behaviour to see what might happen if various trends continue.

Let’s take a look at the recent past for oil prices

In 2008, crude oil prices hit a record $147 dollars a barrel and six months later fell all the way back down to around the $30 level in the spring of 2009. Since that point, oil prices have gained in a straight line pattern all the way back up to the current levels of just over $80 per barrel (as of March 2010).

Let’s take a look at what’s going on in the world in 2010

Firstly, there’s a global recession on, unless you haven’t noticed! This alone is holding down oil prices as western countries including the US continue to use less oil than normal. However, go take a look at China’s figures for oil use in 2009 – Up 29 percent.

Second, western countries are printing money like there is no tomorrow. The western world is in dept, lots of debt. So how is this affecting oil prices and how could this affect oil prices for 2010, 2011 and 2012? Well, oil is priced in US dollars and just take a look at the amount of debt the US has racked up in the last two years. All this debt is going to, at some point in the future have a negative impact on the US dollar, or what many analysts believe to be a US dollar currency crisis, or “a run on the dollar”.

Third, there’s a potential crisis facing the Middle East as Iran continues to defy requests from the IAEA and the western world to suspend it’s nuclear ambitions.

Fourth, peak oil theorists believe that the world consumption of easily extracted crude oil has peaked. If this is true, then oil extraction will become more expensive, hence the price of oil will become more expensive at the same time.

Oil price predictions for 2010, 2011 and 2012

Our prediction is that oil prices will continue to rise at the rate seen between March 2009 and March 2010, hence if this theory is correct then oil prices will be back around the $100 dollar mark by the end of this year. This oil price prediction for 2010 is based on the theory that the US dollar will remain strong and have no crisis in the next few years.

Oil prices for 2011 will remain in the $100 plus range and will then be dependant on other global factors which will determine the price of oil for 2012 and the future. If you take a look at the good news going on in the world right now, it’s hard to see that oil prices will be lower than the current price per barrel and that isn’t going to change any time soon.