Deutsche Bank Raises Brent Forecast as Libya Leads Supply Curbs
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- Created on Wednesday, 02 April 2014 09:12
Deutsche Bank AG raised its estimate for Brent crude prices in 2014 by 9.2 percent amid supply losses in countries such as Libya and stronger-than-anticipated demand in developed nations.
Brent, used to price more than half of the world’s oil, will average $106.50 barrel this year, up from a previous forecast of $97.50 issued in January, analysts led by Michael Lewis in London said in a report. The bank had anticipated price curbs as Iran and Libya added supplies, it said.
“It is likely unrealistic to assume that the taps can quickly be turned on,” the bank said. “Ongoing supply disruptions, most notably in Libya, have undermined bearish expectations.”
Global oil demand will increase by 1.4 million barrels a day this year to a record 92.7 million a day, according to the International Energy Agency, an adviser to oil-consuming nations based in Paris. Political protests at Libyan ports and international sanctions against Iran have continued to constrain oil supplies from these countries. Brent traded for $107.60 a barrel today.
Still, the global ratio of supply and demand currently “feels well balanced,” as weakness in Chinese oil demand growth is countered by recovery in the U.S., and surging output from Iraq compensates for production outages in other OPEC members, according to the bank.
The bank’s forecast for Brent in 2015 was increased to $102 a barrel from $100. It also bolstered its projection for WTI crude in 2014, to $96.60 a barrel from $88.75, and in 2015, to $89.30 a barrel from $85.