23 December 2011 10:28 [Source: ICIS news]
By Tony Dillon
LONDON (ICIS)--The crude oil markets are expected to remain volatile throughout 2012 with the fundamentals of supply and demand continuing to take a back seat, leaving global economics and geopolitical factors as the main drivers.
The eurozone debt crisis shows no sign of coming to an end, with new governments in ?xml:namespace>
The majority of EU nations, with the exception of the
A move by central banks in Europe, the
Following the end of the Libyan conflict, crude oil production was resumed at a much quicker rate than had been expected, although some streams, such as that of main export grade, Es Sider, were said to have sustained serious damage during the fighting and would take some time to repair.
Nevertheless, production was said to have reached 1m bbl/day by the middle of December with claims that it could be back to pre-conflict levels of around 1.6m bbl/day by the end of 2012.
At its meeting on 14 December, OPEC agreed on a 30m bbl/day output quota, roughly in line with the existing level.
The latest Monthly Oil Market Report from the International Energy Agency (IEA) forecast the call on OPEC crude in 2012 at 30.2m bbl/day. It also forecast that global oil demand would average 90.3m bbl/day in 2012, an increase of 1.3m bbl/day over 2011.
The ongoing dispute over the Iranian nuclear programme came to a head again late in 2011, with new sanctions issued against the OPEC producer and talk of embargoes of oil imports from various European nations following the sacking of the
Meanwhile, civil unrest remains widespread through the
The Syrian government shows no sign of standing down despite calls from other Arab nations for it to do so. As such, there would appear to be no short-term end to its near-civil war and oil companies continue to withdraw from the country in response to the sanctions that have been put in place.
Elections are underway in
There were expectations that
Recent reports by Deutsche Bank said that the potential for insufficient upstream investment in core areas of the Middle East and North Africa, as well as in
Deutsche Bank also believes that
In a recent interview with Reuters, Marco Dunand, chief executive of Mercuria Energy Trading, said world oil supplies were tight and this would probably keep prompt prices for North Sea Brent above forward barrels with the market in backwardation for the foreseeable future.
“We see $100 as a floor for Brent going into next year unless OPEC decides to change their policy and supply extra barrels to the market.
“We anticipate a situation where the market will remain reasonably tight for a while.”
A poll of markets analysts taken by news agency Reuters in November forecast that Brent would average $107.00/bbl in 2012 and $109.60 in 2013, while NYMEX light sweet futures were predicted to average $96.50/bbl in 2012 and $103.60 in 2013.
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