InterviewCrude to near $100/bbl in 2010 on China demand - analyst

04 March 2010 20:00  [Source: ICIS news]

By Joseph Chang

SAN ANTONIO, Texas (ICIS news)--Crude oil prices will near the $100/bbl mark by the end of 2010 while US natural gas prices will be more contained, an analyst said on Thursday.

“We see crude oil pushing towards $100/bbl by the end of the year as global economic growth boosts demand, especially in China,” said Lisa Zembrodt, senior commodity analyst at global energy management firm Summit Energy, at the Institute for Supply Management (ISM) Chemical Group meeting in San Antonio, Texas.

“Although OPEC has some spare production capacity that could relieve upward pricing pressures in the short term, China is the key factor that will drive oil prices,” she added.

Crude oil currently trades at around $80/bbl.

Zembrodt said she was “a more cautious bull” on natural gas prices, which she sees rising to near $6/MMBtu by the end of the year, compared with around $4.60 today.

Recovering industrial demand as well as growing use in power generation will drive higher demand, she said, but supply will also rise.

“Natural gas production continues to grow in the US, which also will encourage new demand,” she said.

Increased supplies will come from the production of shale gas, as well as tight gas. Plus, imported liquefied natural gas (LNG) will also become a greater component of the US market, said Zembrodt.

The analyst expects US LNG import volumes to rise from around 600 billion cubic feet (bcf) in 2009 to 800bcf in 2010, and 1,300bcf by 2012.

“As LNG becomes a bigger part of US the supply profile, it will have a greater impact,” said Zembrodt.

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By: Joseph Chang
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