Global oil price at $100-110 in H2: Thai Oil
Thai Oil expects oil price to trade in the range of $100-$110 per barrel in the second half, if Greece remains in the euro zone and there are concrete debt solutions for the region.
In its forecast, the oil company pins hope that the oil price would head up on seasonal demand in the winter and lower supply due to sanctions on Iran as well as violence in several oil-producing countries.
Oil prices have been highly volatile in the first half of this year. It spiked above $120 per barrel in the first quarter, as the US and European Union announced the sanctions, which will take effect on July 1. Greece's victory to get the second bail-out also boosted the price. However, China's economic slowdown plunged the oil price in the second quarter, coupled with Greece's failure to form the goverment in May and the contagious effect on Spain. The price is now below $100 per barrel.
Aside from troubles in the euro zone, Thai Oil said that factors to affect the oil price in the second half include the global economic health. As European countries tighten their belt and China has suffered from lower exports, the US economic recovery remains fragile. This may lead to lower oil consumption. However, seasonal demand for the travelling season in the third quarter and the winter, coupled with a sharp fall in oil prices, oil demand should increase.
As supply from non-Opec countries may be lower than expected, Saudi Arabia has vowed to maintain the supply/demand balance. The world's largest oil producer announced that crude oil price should stay at $100 per barrel, so that it could finance social spending programmes.
