UBS Raises Its Oil Price Forecast — A Lot
UBS Investment Research raised its price forecast for West Texas crude and Brent “a lot.” UBS now expects West Texas crude to average $115 a barrel this year, $120 in 2009 and $116 in 2010 — increases of 32 percent, 54 percent and 53 percent above its previous outlook.
UBS sees Brent crude at $113.50 a barrel this year, $120 next year and $116 in 2010.
“We are abandoning the idea of a near-term collapse in oil prices under the weight of a U.S. recession,” analyst Jan Stuart wrote in a note to investors. “Real demand growth for several key oil products accelerated last winter, while their supply was constrained. The resultant tension in oil markets has not abated. Stress may well intensify this summer and in any case should play out all over again next winter.”
Looking a little farther out, Stuart says demand will likely outpace demand by 2012, pushing prices still higher. “Current trends point to $200 (per barrel) for 2015, which we believe still would not curb demand sufficiently,” the analyst said.
