Oil price forecast, where’s crude heading for the rest of 2010?

Oil price forecast, where’s crude heading for the rest of 2010? It’s officially the 1st of July, and in the second half of 2010, with stock and currency markets showing no sign of any clear trading pattern, what’s in store for crude oil prices for the rest of 2010 and can global events shape the future price of oil? Stock Markets and the Relation to Oil Prices this Year The US stock market is currently down around 12 percent off it’s April 2010 highs of the 11,000 mark on the Dow Jones, however does this dip reflect in the same way for US WTI oil prices? Well in fact yes, WTI oil prices saw a 2010 high of around $87 a barrel in April 2010 and with current prices at the $74 to $75 mark, it seems that oil prices are in fact tracking stock markets at present. The Gulf of Mexico Oil Spill Crisis The Gulf oil spill disaster which began on April 20th 2010 shows little signs that BP can actually stop the leak anytime soon, so will this have an impact on oil prices? The Gulf of Mexico oil platforms supply around 30 percent of crude oil directly to the US and if this supply dries up or begins to drop then yes, this could have a reverse effect on oil prices, sending oil for 2010 higher. We will have to wait and see what happens in early August 2010 as BP have a deadline around this time to contain and plug the oil well. If they fail, expect oil prices to push higher. Tensions in the Middle East and Iran Sanctions US President Barack Obama will sign into law a package of tough, new energy and financial sanctions against Iran because of its nuclear program later today. In June 2010 the UN Security Council approved a fourth round of sanctions on Iran because of its refusal to stop it uranium enrichment program. The EU has decided to impose its own unilateral sanctions against Iran including a ban on new investment, technical assistance and transfers of technologies to Iran’s oil and natural gas sector. So will these new sanctions against Iran have any effect on oil prices? Our thoughts are that the new sanctions will have little or no effect on oil prices, only direct conflict with Iran would rise the price of oil, something which many feel is unthinkable right now. However, in the last two weeks there has been a crescendo of reports that Israel and the US are preparing for war against Iran. Also, the Sunday Times of London reported on June 12th 2010 that Riyadh had agreed to allow Israeli warplanes to fly through its air space to attack Iran. Oil Price Forecasts from Analysts “Getting out of the worldwide recession was always going to be a long slog,” Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington, who forecast oil will average $65 a barrel in the third quarter and $70 in the fourth, said in an interview. “It’s always been our view that the second half of 2010 was going to be a tough period.” “I have had to take a new look at the market since the explosion of the Deepwater Horizon drilling rig,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “We are now looking at a deficit in supply, the scope of the deficit is a question.” Goldman Sachs reported earlier in 2009 that they forecast oil prices to reach between $90 and $95 per barrel in 2010. Here are the reasons why: 1. Recovering economy will demand more oil 2. Investors will purchase oil to hedge against a falling US dollar 3. Expected energy shortfall with OPEC late 2010 4. Easing credit markets help crude oil storage costs Essentially, the global economy is expected to improve in the second half of 2010 which would have a positive effect on oil prices and could lead to increased crude oil demand worldwide. What’s your view on oil prices for the rest of 2010, leave a comment below: Brent oil price at $82 level as Europe problems hit markets Light oil price holds at $86, awaits latest US oil stock data Brent oil price trading at 2010 highs on contract expiry Brent oil price trading back over $78 on higher markets WTI oil price back at $75, stock markets trading lower Crude oil prices fall heavily, following stock markets lower Brent oil price dips to $78, finding $80 mark a struggle WTI oil price rebounds near $75 on weaker US dollar WTI oil price at $72, US oil production in 2011 to drop OPEC weekly crude oil price rebounds to back over $70 WTI oil price nears $75 after US crude supply data WTI oil price trading higher, over $73 on US supplies data Brent oil price trading over $74 on US market bounce Brent oil price back near $72 amid mixed market data Brent oil trading lower on continued euro debt concerns Oil prices trading at $71 mark, following stock markets Oil prices trading near $70 as global stock markets slump Brent oil price trading at $74 as new Euro concerns hit WTI oil price at $69 mark on strong dollar, high stocks Asia’s richest man says get ready for $100 crude oil price

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Oil price forecast, where’s crude heading for the rest of 2010?