Oil prices in the coming weeks:
So, will oil manage to climb up, even further? Well, major groups like IEA and EIA have projected strong demand for oil in the near future. According to Barclays oil prices were likely to rise to $80-$90 range. Quoting data from Joint Oil Data Initiative (JODI), which said that the Asian demand for oil was increasing by more than 2 million barrels per day, Barclays analysts Paul Horsnell said, “If Asian demand can grow at such rapid rates when prices are in the $70 to $80 range, then prices cannot stay in that range for much longer”.
In China, for a change, the oil stocks are higher than the demand. So, China’s largest producer, supplier and refiner of oil, Sinopec is said to be introducing a subsidy of 130 yuan or $19 per ton, in an effort to increase the export of oil. The subsidy is expected to be in place till the demand and supply are balanced.
And, OPEC is meeting on March 17. Analysts predict that there would be no changes in the output quotas. Iraqi Oil Minister Hussain al-Shahristani said “Despite the fact the global economy is gradually recovering, demand has not increased significantly enough to make us reconsider our production ceiling”.
Correctly forecasting the price of oil is a science in itself. The situation in the Middle-East should be kept in mind. So, read the reasons, analyse the pointers and make your own judgment before investing.