Monday, July 4, 2011

Goldman analysts prediction impact of the IEA release strategic stockpiles on oil prices

Goldman analysts prediction impact of the IEA release strategic stockpiles on oil prices : Goldman Sachs Group Inc. lowered its estimate of the impact of the International Energy Agency's release of strategic stockpiles on oil prices.

The bank forecasts Brent prices in 2011 may decline between $6 and $8 a barrel, down from its earlier projection of a drop of $10 to $12, and $3 to $5 for 2012, less than an earlier outlook of $5 to $7, it said in an e-mailed report dated July 1. Less oil than anticipated will actually reach the market, limiting the effect of the IEA inventory sales, according to the report.

The IEA, an adviser to 28 consuming nations, has said it would release 60 million barrels of light, low-sulfur oil. The actual amount sold may be about 39 million barrels as member countries such as Japan plan to only reduce the stockholding requirements for refiners rather than sell actual supplies, Goldman said.

"We expect the impact of the IEA release on prices to be determined by the amount of oil sold from government-controlled inventories," said analysts David Greely and Stefan Wieler in New York. "Lowering holding requirement levels for the oil industry might result in very little additional oil being made available and hence the price impact from those measures will likely be very limited."

Goldman analysts first predicted that the agency's release would push its three month forecast for Brent to between $105 and $107 a barrel, according to a June 23 report.
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1 comment:

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