Amrita Sen, Commodities Analyst at Barclays Capital, shares her outlook for oil prices

Source: Dukascopy Bank SA
© Amrita Sen
Oil prices rose 2% on Spain's request of European bailout to prop up its ailing banks. Do you expect further oil prices increase?
We do not except the prices to consolidate over here, and we do not naturally think price will go up sustainably, because the macro environment has a lot of question marks. Until there is a bit more clarity on the situation, sustainable price increase will be difficult from here.
What will be the main drivers for oil prices in the nearest future?
A lot of important things to look out:
  • 14 June—OPEC meeting,
  • 17 June—Greece elections,
  • 18 June—the Iran talks,
  • 18-19 June—G20 Summit,
  • European officials talks on the EFSF.
Lots of issues that can potentially move the market. However, the first three would be the most critical.

What is your outlook for oil prices the short and long term?
In the short term we would expect prices to consolidate. Second half of the year in terms of balance still looks reasonably constructive, thus we would expect a pick up, and for that we would have to see a substantial improvement in the sentiment of the macro front.
What is a fair price for sweet crude oil and for Brent?
We still have got $120 average for the second half of the year based on currently the balances that we have got. Of course should there be a deterioration in the macroeconomic outlook, then we will have to revise it. Currently we are still holding that price forecast.

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