Commerzbank: 2013 Brent to average at $ 121



REUTERS

Published — Friday 14 December 2012

Last update 13 December 2012 10:28 pm

| نسخة PDF Print News | A A

LONDON: Commerzbank said oil prices are set to climb in 2013, initially driven by risks to supply and then by improving demand.
“We believe that the market is too optimistic for the supply prospects and too pessimistic for the demand prospects,” the bank said in a note to clients.
“The market is thus likely to tighten over the course of the year.”
Commerzbank kept its 2013 average Brent price forecast at $ 121 per barrel, and forecast a 2014 average of $ 120.
It reduced its 2013 WTI average price forecast to $ 108 per barrel from $ 113, and sees a 2014 average of $115.
The bank said new pipeline capacities should narrow the discount of WTI against Brent. It sees Brent at $ 125 per barrel and WTI at $ 115 by the end of 2013.
With the rise of Seaway pipeline’s throughput capacity to 400,000 barrels per day by early 2013, much more crude oil can flow from the US Midwest to the Gulf Coast, thereby na rrowing the Brent and WTI spread to $ 10 by the end of 2013 despite a further increase in US oil production, Commerzbank said.
The ultra-loose monetary policies being pursued by leading central banks should lead to stronger investment in t he crude oil sector, the bank said.
“In view of negative real interest rates, investment alternatives are currently lacking, and against the backdrop of growing risk appetite, this should lead to rising demand for crude oil investments.”
The backwardation structure of the Brent forward curve — high near-term prices relative to long-term prices — makes investments in Brent attractive, Commerzbank said.
It said the ” lower price level and associated catch-up potential argue in favor of investments in WTI.”
Crude oil slipped to around $ 109 a barrel yesterday due to rising US oil stockpiles, while fears that the world’s largest economy might miss a deadline for next year’s budget and risk a recession also kept bulls in check.
Benchmark Brent crude fell 35 cents to $ 109.15 a barrel by 1413 GMT, while US crude was at $ 86.54, down 23 cents. The January Brent contract expires today.
Deadlocked talks to avert a “fiscal cliff” of steep tax increases and budget cuts in the US returned to investors’ focus after the announcements by the US Federal Reserve of more monetary stimulus buoyed global markets on Wednesday.
Failure to reach a compromise on the US budget by the end of the year risks pushing the world’s biggest oil consumer into recession and this has stoked fears a fragile recovery trend emerging in China and some other countries would be stifled.
Sharp differences on the 2013 budget persisted between Congressional Republicans and the White House on Wednesday, when negotiators warned the showdown could drag on past Christmas.
“People are worried about the economy, the fiscal cliff in the US and the European economy still remains a tricky one,” said Richard Langkemper, analyst at Argos North Sea Group in Rotterdam.
US crude inventories rose last week, against expectations of a fall, while gasoline and distillates stockpiles jumped more than expected. The fuel stocks rose despite a pull-back in refinery output and steady import levels.
“I am generally bearish on crude oil, because there is too much supply, particularly in North America,” said Fawad Razaqzada, technical analyst at GFT in London.
Demand will be sluggish through 2013 as economic expansion stays tepid and crude supply levels comfortable, which could ease price pressure on consumers, the International Energy Agency (IEA) said this week.
Global oil demand would grow 865,000 barrels per day in 2013 to hit 90.5 million bpd, the IEA said.
In Vienna, OPEC agreed this week to retain the producer group’s 30-million barrels-a-day output target and is relaxed about the prospect of rising inventories in the first half of next year.
“It became clear once again that the cartel is relatively unwilling to act, especially when prices are high,” Commerzbank commodity analysts said in a note.
The target is higher than is required from OPEC to meet demand next year, some market observers say, but the excess supply has cushioned the impact on prices from a sharp drop in Iranian oil exports due to sanctions this year.
Big powers hope soon to agree with Iran to hold a new round of nuclear talks in another bid to resolve a protracted dispute over Tehran’s atomic program.
Inspectors from the UN nuclear watchdog arrived in Tehran in the first such meeting since August to ease international concerns over the program.

What's happening around Saudi Arabia

TAIF: Makkah Gov. Prince Khaled Al-Faisal inaugurated state-of-the-art Radf public park in Taif which has an interactive fountain — the biggest of its kind in the Kingdom and spread over 13,000 sq meters. The fountain has colored lighting and a displ...
JEDDAH: The Special Criminal Court has issued a preliminary order in a case related to a Saudi national who fought with militant organizations in Syria. The court, functioning at its summer headquarters in Jeddah, sentenced him to a seven-year jail t...
RI YADH: The Kingdom has decided to increase the financial aid to Palestine by raising its monthly aid to the Palestinian Authority’s budget from $14 million to $20 million. The substantial increase brings Saudi Arabia’s yearly aid for Palestine to $...
JEDDAH: The Saudi Ambassador to Jordan has rejected terror charges against Saudis incarcerated in Iraqi jails and slammed the government of that country for concealing information on the inmates."The file of Saudi prisoners in Iraq has grabbed the at...
JEDDAH: Six female members of the Shoura Council participated in a training program to raise awareness among citizens on the municipal elections in which women will participate. The program was organized by Al-Nahda Philanthropic Society for Women un...
RIYADH: Custodian of the Two Holy Mosques King Salman has issued an order appointing and promoting 96 members at the Bureau of Investigation and Public Prosecution (BIPP) at various ranks.Sheikh Mohammed bin Fahd Al Abdullah, BIPP president, expresse...
DAMMAM: After the recent increase in verbal and physical harassment of women and girls in the Kingdom, they have turned to martial arts in order to protect themselves. Amani Yassin, a coach at Taekwondo Training Institute, said: “Saudi women are inte...
RIYADH: A youth has been arrested for allegedly killing a Saudi man near the Madinah airport recently. The police apprehended the alleged killer without incident. The suspect, a 24-year-old Saudi, is alleged to have stabbed the victim several times...
RIYADH: A total of 4,326 male and female students started their local and regional summer program for 2015 under the sponsorship of the King Abdul Aziz and his Companions Foundation for the Gifted and Creativity (Mawhiba) throughout the Kingdom on Su...
BURAIDAH: The security patrolling team in Qassim detained a woman for driving a car on the streets of Buraidah.Her case was referred to the higher-ups for necessary action.According to Maj. Badar Al-Sahibani, spokesman Qassim police, the woman is ide...
RIYADH: Recent statistics announced by the Saudi Commission for Health Specialties, which coincided with consensus surveys in the Kingdom for the year 2014, revealed that there is only one doctor for each 800 people, and one nurse for every 285 peopl...
Indian expats have paid glowing tributes to one of its most beloved presidents and iconic leaders on Tuesday, as condolences poured in from various parts of the Kingdom for A.P.J. Abdul Kalam following his sudden death on Monday.Hemant Kotalwar, char...
RIYADH: The National Center for Assessment in Higher Education (Qiyas) has announced the dates of tests for male and female students for the new academic year.Ibrahim Rasheed, director for public relations and communications, said the center has com...
RIYADH: The Ministries of Health and Education in cooperation with the Kingdom’s universities launched a program dubbed, “Education and Work,” in Riyadh on Tuesday to help Saudi youth find employment in the public and private sectors. A memorandum of...
JEDDAH: A senior Health Ministry official said butchers and cooks are more likely to be infected with the coronavirus because they handle and process camel meat.Dr. Abdul Aziz bin Saeed, undersecretary at the Ministry of Health for Public Health, sai...

Stay Connected

Facebook