Hong Kong-based Bernstein Research has updated its 2012 Brent oil price forecast from $90/barrel to $105/b, reflecting continued high prices due to supply concerns around Iran.
For the year to date, Brent has averaged $115.40/b, "making it unlikely that our previous forecast of $90/b average for the year can be reached," Bernstein said Friday in a note. "We therefore increase our 2012 estimate for Brent to $105/b and for WTI to $95/b, maintaining a $10/b differential."
Bernstein's oil price forecasts for 2013 and 2014 are unchanged at $110/b and $120/b respectively.
"Our fundamental view on the oil price remains unchanged and we expect a decline through 2012," the analysts added. "Despite the increase in our 2012 price estimate, fundamentals still point to a lower Brent price at around $95/b."
Bernstein cited indicators such as US gasoline demand, which is down 7% year on year, and Chinese car sales, down 24% year to date, showing negative growth. In addition, the analysts expect non-OPEC supply to increase by 2.5% in 2012, driven by an increase in US unconventional liquids output from 790,000 b/d to 1.27 million b/d, with Brazil and Canada also boosting volumes.
"Under our base case scenario with a loss of 1 million b/d of Iranian exports, we therefore see fundamental support for the oil price only at $95/b," Bernstein said.
"There is, however, a real risk to supply that could push oil prices higher and if supply from Sudan, Yemen and Syria was to be completely off line for the entire year this would add a further $24/b to our oil price estimate," the company added.
"From 2013 we remain positive on the oil price and are ahead of consensus from 2014 onwards, with a nominal price estimate of $130/b in 2015," Bernstein said.
