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Oil could hit a new record in '12 on demand
Published in The Saudi Gazette on 24 - 12 - 2011

Crude oil may rise for a fourth year to a record average price in 2012 as demand in emerging markets increases and the US avoids a recession.
West Texas Intermediate oil on the New York Mercantile Exchange will reach an average of $100 a barrel in 2012, based on the median of 27 analyst estimates compiled by Bloomberg, topping the all-time high of $99.75 set in 2008. The US benchmark is on course to average $95 a barrel this year.
Oil prices rose to near $100 a barrel as worries over global security issues outweighed weak economic data in the US.
Oil edged up Friday in low-volume trading, on pace to post weekly gains and supported by concerns about potential supply disruptions in Iran and Iraq and by signs of a strengthening US economy.
Geopolitical uncertainty, especially in Iraq and Iran, also kept investors focused on potential threats to supply.
Brent February crude rose 28 cents to $108.17 a barrel by 12:57 p.m. (1757 GMT).
US February crude rose 62 cents to $100.15 a barrel, having reached $100.23.
US economic data released this week showed signs of an improving economy, but on Friday the Commerce department reported weak consumer spending and income growth.
Global demand will climb 1.4 percent, with China accounting for more than a 10th of the amount used, according to the International Energy Agency. Crude in New York advanced 8 percent in the year through yesterday.
“High prices come from very well-supported fundamentals,” Mike Wittner, the head of oil-market research at Societe Generale SA in New York, said by phone on Dec. 15. “Supplies are very tight, at five-year lows,” in the world's leading economies, said Wittner, who projects West Texas Intermediate oil will average $103 a barrel in 2012.
Industry-held supplies in the 34 members of the Organization for Economic Cooperation and Development fell 1.4 percent to 2.63 billion barrels in October, leaving them below the five-year average for a fourth month, the IEA said in a Dec. 13 report.
Stockpiles of heating oil and diesel held in OECD countries dropped 23.1 million barrels to 538.4 million in October, a three-year low.
“We need to see prices rise to a level where we get supply and demand to balance without drawing on inventories.”


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