© Nick Trevethan
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The European Union has recently announced that not only will restrictions apply to crude oil imports into Europe, but they will also prevent European entities selling Iranian crude to non European countries. The Europe will not be able to buy crude oil from Iran and sell to China or India, for instance, and will have to be completely out of the trade.
Our forecast for the WTI crude oil is slightly steeper: $103 in Q1, $105.5 in Q2, $108 in Q3 and $113 in Q4. A forecast rise in the year 2012 for WTI is about $10.
One of the reasons for higher prices on WTI crude is the fact that we see more Libyan oil returning to the market which should erode some of the premium which developed from the second quarter of the last year during Arab spring. Also it is important that the Libyan oil that is coming back to the market is light sweet crude which is comparable to Brent oil.