J.P. MORGAN DOWNGRADED ITS 2012 AND 2013 TARGET FOR WTI CRUDE
J.P. Morgan downgraded its 2012 target for WTI crude by 12 to 96 dollars p.b. and its 2013 forecast by 22 to 99 dollars, according to Reuters. G.P. Morgan took an axe to its 2012 and 2013 forecasts for oil prices today.
The rather negative report came as oil prices have tumbled in seven of eight the last weeks, including the scaring 5.4% decline of last week to the lowest levels since fall.
Analysts also slashed their 2012 Brent price by 13 to 106 a barrel and 2013 forecast by $21 to $104 a barrel.
J.P. Morgan lowered its 2012 demand growth outlook to 0.60 million barrels per day from 1 million barrels per day.
"Global petroleum demand in second quarter of 2012 has slackened even further than we expected, as recent economic activity has disappointed our already modest expectations,” J.P. Morgan wrote in a communication.
This comes at the same time that minister of energy of Colombia has announced that for second consecutive month the gas prices are to be reduced.
The world is waiting for euro zone’s sovereign debt crisis to be solved and therefore risky assets like stocks and especially commodities have lost the last couple of weeks.
On the other hand China’s economy has continued to slow, decreasing the appetite for commodities, such as crude.
The analysts at J.P. Morgan predicted that global oil prices will probably come back from their current low levels thanks to the summer time in the USA, the Iranian blockage and an improving economic fundamentals in Europe and around the world.