Daily News Egypt

Oil may hit $100 on China, QE, France, says bank - Daily News Egypt

Advertising Area




Advertising Area

Oil may hit $100 on China, QE, France, says bank

LONDON: Oil may reach $100 a barrel sooner rather than later on Chinese demand, a dollar weakening due to anticipated U.S. quantitative easing and expected restocking of French inventories when strikes end, JP Morgan said. The bank also raised its forecast for US crude futures to an average $81 a barrel for the current fourth …


LONDON: Oil may reach $100 a barrel sooner rather than later on Chinese demand, a dollar weakening due to anticipated U.S. quantitative easing and expected restocking of French inventories when strikes end, JP Morgan said.

The bank also raised its forecast for US crude futures to an average $81 a barrel for the current fourth quarter from previous $75 a barrel. The 2010 and 2011 forecasts were raised by roughly $2 to $78.50 and $82.50, respectively.

Oil prices rose above $81 a barrel on Friday as positive German data and a dip in the dollar index stoked buying for commodities ahead of a G20 finance ministers’ decision on currencies.

The G20 meeting in South Korea looked unlikely to reach a deal on a US-led initiative for a commitment from emerging countries to allow their currencies to rise.

The US dollar index was volatile early on Friday and then turned negative in a move that pushed the US crude benchmark up over $1 in intra-day trade as investors rushed to buy alternatives to cash.

"The key risk is that we are being too cautious and that the threat of $100 per barrel oil that is implicit in our fourth quarter 2011 oil forecast arrives much sooner than we expect — driven by not only a weak dollar, but also by rampant Chinese and emerging market demand, the rebuilding of French strategic stocks," Lawrence Eagles of JP Morgan said in a research note.

JP Morgan estimated supply disruptions caused by the strike at France’s largest oil port Fos-Lavera since Sept. 27 and industrial action at refineries reducing middle distillate inventories there by 8 million barrels in October.

France will have to rebuild fuel stocks as soon as the strikes end.

"In conclusion we can see the need for additional imports of diesel," the bank said.

"But should the strike fade over the coming weekend then the overall impact to French inventory levels will seem substantial but not catastrophic and should provide an opportunity for additional European imports of ultra-low sulphur diesel in the short term."

 

Topics: nasr city

Advertising Area

https://dailyfeed.dailynewsegypt.com/2010/10/23/oil-may-hit-100-on-china-qe-france-says-bank/
Breaking News

No current breaking news

Receive our daily newsletter
Subscribe