New York : JPMorgan Chase lowered by 5.5 per cent its forecast for New York oil prices this year on speculation a slowdown in global economies will limit crude's potential to rise.
The bank cut to $77.25 a barrel its estimate for the average price of West Texas Intermediate crude on the New York Mercantile Exchange during the rest of 2010, from a forecast of $81.75 a barrel made last month, according to a monthly report. It lowered its forecast for 2011's average price to $79.25 a barrel from $90.
"We see both lower prices and a tighter range ahead — but with increased risks," Lawrence Eagles, an analyst for the US bank, wrote in the report. "Weaker economic growth, energy efficiency and Organisation of Petroleum Exporting Countries intransigence provide downside risks."
Crude may fall this week amid increases in US supplies and Opec production, a Bloomberg News survey showed. Crude oil has declined by 0.5 per cent this year to $78.95 a barrel in New York, after rising 78 per cent last year.
"There's an increased drive towards energy efficiency and renewable energy in China," said Henry Wang, managing director, of Beijing-based energy consultant Gate International. "This could create downward pressure on oil demand."
Pressure on China's oil demand, the world's biggest energy user, affects global consumption, which may impact prices, Wang, who formerly worked for Royal Dutch Shell in China said.
The absence of "significant" demand recovery in markets such as North America and Europe prompted Singapore-based Tri- Zen International to cut its forecast in April for Brent Blend to $75 a barrel this year, Tony Regan, a consultant said.
