Close 

Panorama 2013: Easing of oil price unlikely

With futures markets anticipating a price of Brent crude oil of $110/bbl this year, an easing to $90/bbl appears possible in three unlikely cases, according to Panorama 2013, an annual review by IFP Energy Nouvelles (IFPEN) of Paris:

• “A strongly deteriorated economic situation” with growth worse than projected by the International Monetary Fund in its base-case World Economic Outlook.

• Greater stability and less tension than prevail now in North Africa and the Middle East.

• Faster-than-forecast growth in US production of oil from shales and other low-permeability formations.

“Such scenarios, unlikely today, must not be excluded in principle,” wrote the Panorama 2013 author, Guy Maisonnier. “Surprises are a common occurrence in the oil market.”

IFPEN calls $110/bbl “an unstable balance threshold, changing according to geopolitical and financial vicissitudes.”

It identified Iran as a “sword of Damocles hanging over the market” as international concern over the Islamic Republic’s nuclear program raises chances for military conflict.

In a report written in November, the industry-research group identified the general election in Israel last month as one of two events important to Iranian tensions, saying the outcome would determine the freedom to act by the Israeli prime minister. While Benjamin Netanyahu, the incumbent, held office in the election, he will have to form a ruling coalition after the political alliance through which he has governed lost support.

The other important event is an election in June that will determine the successor to Iranian President Mahmoud Ahmadinejad, whose outspoken hostility toward Israel has amplified worry about Iran’s nuclear ambitions.


To access this Article, go to:
http://www.ogj.com/content/ogj/en/articles/2013/02/panorama-2013--easing-of-oil-price-unlikely.html