15 September 2011 09:11 [Source: ICIS news]
SINGAPORE (ICIS)--Brent crude prices may hit $130/bbl (€95/bbl) in the next 12 months, pressured by tight supply even as demand in developed countries is likely to be weak, an analyst at investment bank Goldman Sachs said on Thursday.
"While demand condition is at the forefront now, supply side issues are also important," said Allison Nathan, a senior commodities economist at Goldman Sachs, in a press briefing.
Fears of another round of global recession, with the eurozone deep in its debt problems and the US economy still showing signs of weakness, have been hounding the equities and commodities markets since August.
But Nathan said: "We need a more reccesionary event to meaningfully derail this commodities view [of continued increase in oil prices]."
Oil prices will continue their ascend next year, backed by firm demand coming from developing economies like China, against low supply, said Nathan.
Production losses from Libya will also continue to support Brent oil prices going into next year, she said.
Crude production in Libya, an OPEC member, was significantly disrupted by months of civil unrest.
Meanwhile, oil demand from emerging markets is expected to remain robust in the next 12 to 24 months, given that they have a much stronger pace of economic expansion compared to developed economies, Nathan said.
China is expected to post growth of about 9.3% this year and 9.2% in 2012, while BRIC (Brazil, Russia, India and China) countries as a whole will see growth of around 7.7% this year, she said.
This compares to the 1.7% and 2.1% growth expected in advanced economies this year and 2012 respectively, she added.
($1 = €0.73)
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