Analysts Downgrade Crude Price Forecasts
A barrel of Light Sweet will cost $63.48 in 2007, Reuters reported referring to the consensus-forecast of analysts. The outlook shaped a fortnight ago set forth $63.74, while the October forecast exceeded $64. Urals is predicted to cost $58, $0.7 down vs. the price forecasted a quarter ago, Russia’s Development Center said in the survey of 32 analysts firms of the country and overseas.
The crude has been riding the rising wave for the last few years, quite often ahead of all forecasts of the analysts. The Urals averaged $27.2 in 2003, jumped to $34.4 in 2004, stood at $50.6 in 2005 and is expected to peak to $61 this year. But it looks like the trend has eventually broken and today’s scenario sets forth the ailing prices for crude.
In view of inflation, this year’s maximum of $77 to $78 corresponds to $35 of 1982, which was followed by the slump in prices.
Nowadays, the most common opinion of analysts, which is shared by International Monetary Fund's (IMF) Managing Director Rodrigo de Rato, is that the crude prices will stand still for a year or two. Today’s market behavior, said Credit Suisse analysts, is not the decline in crude prices but rather their fluctuation around the maximum. But this outlook is based on the assumption that the crude won’t soar any longer, even if the United States pulls out of Iraq and the situation around Iran improves to stability.
So, Russia will have to adjust to the new reality after benefiting from the never-ending growth in crude prices in the recent five years.
www.kommersant.com
All the Article in Russian as of Dec. 26, 2006
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