Oil may hit $100 a barrel in 2011
NEW YORK. December 7. KAZINFORM Crude prices reached a two-year high last week, mainly boosted by more economic recovery signs. Traders and investors are expecting oil to continue rising in 2011, given the worldwide economy recovery, weaker U.S. dollars and demand-supply gap. Gone are the days of low oil prices, said Fatih Birol, chief economist of the International Energy Agency (IEA), in a recent interview with Xinhua. Kazinform refers to Xinhua.
The price of crude oil has been surging of late on renewed optimism regarding the state of the global economy, Birol said, adding that in this context, oil is set to rise and low oil prices have "gone."
Conley Turner, Wall Street Strategies' senior research analyst, echoes with Birol, saying: "The outlook for the price of oil to reach the psychologically important level of 90 dollars per barrel is very much a foregone conclusion."
"In fact, prevailing expectation is for this to occur by the end of the year. Traders and investors are actually already looking to the next benchmark of 100 dollars per barrel level to be attained by the end of 2011," he told Xinhua.
"The fact of the matter is that the demand for oil is ramping up across the globe as economic activity increases," Conley Turner, Wall Street Strategies' senior research analyst said.
According to IEA monthly report released on Nov. 12, average daily oil consumption in 2010 will increase by 2.34 million barrels, and by 1.19 million barrels in 2011.
But as to supply, the Organization of the Petroleum Exporting Countries (OPEC), which controls over 35 percent of the world's output, has decided to maintain the output target for 2010 at its October meeting.
Meanwhile, U.S. Energy Information Administration said in its "Short Term Energy Outlook" released on Nov. 9 that most of the 1.0 million barrels per day projected growth of non-OPEC supply in 2010 comes from the United States, Brazil and Russia, but this growth in world supply is not sustained in the 2011 forecast.
Total non-OPEC supply will fall by 250,000 barrels per day in 2011, primarily because of declining production of North American and North Sea oilfields and decreasing supplies from Russia, said the Energy Outlook.
IEA forecasted that oil demand will continue to grow steadily, reaching about 99 million barrels per day (mb/d) by 2035, 15 mb/d higher than in 2009.
Gap between demand and supply is expected to increase, pushing up prices further.
Dollar, pricing the commodities, remains the crucial factor to the changes in the oil market. The U.S. Fed announced a 600-billion-dollars bond buying plan last month, sending dollar to a falling path, as one of the consequences, oil prices surged. Kazinform cites Xinhua. See www.xinhuanet.com for full version