Thursday, March 18, 2010

Barclays and Bank of America see looming oil crunch

clipped from

For oil markets, it as if the Great Recession never happened. Surging demand
in China, India and the Middle East is making up for decline in the
debt-crippled West, ensuring another global crunch within three or four

Barclays and Bank of America see looming oil crunch

Bank of America and Barclays Capital, two leading oil traders, have told
clients to brace for crude above $100 (£64) a barrel by next year, before it
pushes relentlessly higher over the decade. This is a stark contrast from
recessions in the 1980s and 1990s, when it took years to work off excess
drilling capacity built in the boom.

"Oil has the potential to flirt with $100 this year. We forecast an
average price of $137 by 2015," said Amrita Sen, an oil expert at
BarCap. The price has doubled to $78 in the last year.

China has overtaken the US as the world's top car market. Mr Blanch expects
oil demand to rise by a further 2.8m barrels per day (bpd) in China and 2.5m
bpd in India by 2015, when two giants will be absorbing the lion's share of
Gulf output.
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