Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Opinion / Online-views/  Morgan Stanley pegs oil at $35 this year
BackBack

Morgan Stanley pegs oil at $35 this year

Morgan Stanley pegs oil at $35 this year

Premium

Singapore: Crude oil in New York will average $35 a barrel this year as the global economy contracts, limiting demand for fuels, Morgan Stanley said on Tuesday.

The price of West Texas Intermediate crude, the basis for futures traded on the New York Mercantile Exchange, will fall to a low of $25 a barrel in the second quarter, according to the 2 February report by analysts led by Hussein Allidina. “Crude will rise to average $55 a barrel in 2010 and $85 a barrel in 2011," he said in the report.

Oil futures in New York have slumped 73% since reaching a record $147.27 a barrel in July as the world’s economies have shrunk. The International Monetary Fund said last month gross domestic product in the US will contract 1.6% this year, while Japan’s will fall 2.6% and the euro-area economy by 2%.

“We think that the oil markets are lagging the macroeconomists in understanding the severity of the economic outlook," the analysts said. “As they catch up, and as the full extent of the demand weakness becomes clear, we expect prices to move lower."

Crude oil for March delivery fell 1.1%, to $39.65 a barrel in after-hours Nymex electronic trading. It was at $39.81 a barrel at 6.44pm Indian Standard Time.

“The recession in developed economies, combined with slowing emerging markets such as China and India, will cause oil demand to fall by 1.5 million barrels a day in 2009," the analysts said.

Brent crude oil traded in London will perform slightly better, averaging $36 a barrel in 2009, the analysts said. It will gain to an average of $55 in 2010 and $84 a barrel in 2011. Brent for March settlement rose as much as $1.03, or 2.4%, to $44.85 a barrel on London’s ICE Futures Europe exchange. The contract Monday declined $2.06, or 4.5%, to settle at $43.82 a barrel.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 03 Feb 2009, 10:56 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App