Strategist, Commodities research at SEB
I believe that the sanctions imposed on Iran, the EU decision to stop importing crude oil and agreement on the second bailout package for Greece will significantly affect the consumer prices in the EU.
Personally I regard the EU refusal to import Iranian oil as a wise decision in the long-term. No one actually wants Iran to get an atom bomb. If that happen, it will have a serious destabilizing effect on the region. It is definitely not in everyone's interest to have another bomb in that country of the world.
The further increases in oil prices may threaten the global economy, as well as have an impact on the EU crisis. It is the end-consumer who is affected. It is not a black-and-white situation, though. It is a gradual increase in economic pressure from that factor.
I would not agree that the weakness in the major economies may put downward pressure on prices of oil and other commodities. Even though, it is not exactly the situation we are observing now. The European situation is cooling down a bit more rapidly than expected. We also see very positive signs from China and the US economy. Even though, the growth numbers are not that impressive when we look into the details. It is still quite decent growth. It certainly looks better on the macroeconomic global perspective. The basic idea is if there is a downturn in macroeconomic conditions, it will definitely have an impact.
By the end of 2012 we anticipate the crude oil price will increase up to $120.