Ottawa Citizen

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Pre­dict­ing oil prices in 2013


Ba­clays Cap­i­tal ex­pects non-OPEC pro­duc­tion to rise by 390,000 bar­rels per day in 2013, with al­most all the growth orig­i­nat­ing from North Amer­ica. How­ever, other non-OPEC coun­tries will see a drop in their sup­ply, which would in­crease de­mand for OPEC oil in the New Year. “This places our call on OPEC crude and in­ven­to­ries cal­cu­la­tion at 31.5 mil­lion bpd, higher by 0.4 mil­lion bpd,” wrote Miswin Mahesh, an an­a­lyst at Bar­clays Cap­i­tal. “While we are likely to see sim­i­lar themes on mar­ket bal­ances, con­cerns over macroe­co­nomic dis­con­ti­nu­ities are ex­pected to play a role next year.” The bank ex­pects West Texas In­ter­med­i­tate to av­er­age US$115 in 2013, US$10 lower than its Brent in­dex bench­mark. The BarCap out­look is above con­sen­sus. A Reuters monthly sur­vey of 26 an­a­lysts forecast Brent crude oil will av­er­age US$108 per bar­rel in 2013, down from an av­er­age of US$111.71 so far this year. Mean­while, Ju­lian Jessop, head of com­modi­ties re­search at Cap­i­tal Eco­nom­ics, has emerged as one of the most bear­ish an­a­lysts in the in­dus­try, ex­pect­ing US$85 for Brent crude. “A fad­ing of Mid­dle East risks alone could there­fore be enough to knock be­tween $10 and $20 off the price of a bar­rel of Brent,” Mr. Jessop said.

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