KUALA LUMPUR: Standard Chartered Global Research expects regional tensions in the Middle East to persist for the next two quarters, maintaining a supply-risk premium in the oil market.
It said on Thursday, March 3 that it expected anticipated near-term shortages and this would likely to encourage further investment flows.
'We are raising our crude oil forecasts for this year. We expect ICE Brent to mostly trade in a US$110 to US$120 per barrel range, averaging US$115 until the end of 3Q (our previous forecasts were US$97 in 2Q and US$95 in 3Q), before moderating to average US$110 in 4Q as geopolitical tensions ease but fundamental market tightness persists.
'This gives a full-year average of US$111. Within these averages, volatility is likely to be high, with a strong possibility of spikes from time to time in response to geopolitical events. The key downside risk is a collapse in demand, but at these price levels we do not expect demand curbs to be sufficient to offset the supply shock,' it said.
It said on Thursday, March 3 that it expected anticipated near-term shortages and this would likely to encourage further investment flows.
'We are raising our crude oil forecasts for this year. We expect ICE Brent to mostly trade in a US$110 to US$120 per barrel range, averaging US$115 until the end of 3Q (our previous forecasts were US$97 in 2Q and US$95 in 3Q), before moderating to average US$110 in 4Q as geopolitical tensions ease but fundamental market tightness persists.
'This gives a full-year average of US$111. Within these averages, volatility is likely to be high, with a strong possibility of spikes from time to time in response to geopolitical events. The key downside risk is a collapse in demand, but at these price levels we do not expect demand curbs to be sufficient to offset the supply shock,' it said.
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