WTI oil price trading near $72, Barclays cut 2010 forecast

6 July 2010 6 July 2010

BonTrade

WTI oil prices open Tuesday’s trading session slightly higher, near the $72 a barrel mark as Barclays analysts cut their 2010 oil price forecast in the fourth quarter of 2010 to $87.

WTI Light crude oil futures for August 2010 delivery were trading at $71.94 a barrel, 07.15 GMT on the NYMEX.

Barclays Capital analysts have cut their forecast for the average oil price in the fourth quarter to $87 a barrel from the previous estimate of $92 and lowered its prediction of futures oil prices for 2011 to $92 from $97 a barrel.

“Nervousness about the broader economy and sustainability of demand keep oil prices under the thumb,” Barclays Capital said in a report.

“The grim external sentiment is likely to hang over the oil market like a sword of Damocles. In turn, that is capping the short term upside, and severely slowing the price progression up to something more befitting the current state of oil market fundamentals.” Barclays said in their report.

Barclays Capital lowered its 2010 oil price forecasts for the first time in 16 months, citing persistent weak economic indicators and concerns of a slowing global recovery that overshadow rising demand for crude oil.