Oil Prices and the Oil Market
Barclays: Oil prices should have exceeded 150 USD / bbl had the Eurozone crisis not hit
- Details
- Category: Oil | Brent and WTI Crude
- Published on Friday, 21 October 2011 14:07
- Written by Super User
Unless macroeconomic fears lift decisively, the upside above $120 seems limited currently.
Barclays plc (LON:BARC) have today said that had the macroeconomy pessimism created, in large part by the Eurozone debt crisis, not emerged then a barrel of brent crude would have probably exceeded 150 USD / bbl at some point this year.
In the view of Barclays Capital, unless there is a major policy catastrophe then the downside below $100 looks fairly limited given the strength of the fundamentals.
A Commodity Briefing note on oil prices released by Barclays Capital today says:
"Indeed, were there not such a degree of macroeconomic uncertainty and pessimism, we believe that Brent prices would have been far higher and probably exceeded their all-time high and moved past $150/bbl at some point this year.
"The fundamentals are far tighter than they were in 2008, and the current geopolitical context creates significant tail risks in a world with such limited spare capacity. And even as worries about a global slowdown translating into an oil demand slowdown continues to grip the market, the underlying data has been looking more upbeat."
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