KUWAIT – Prices of oil are forecast to be unstable and turn downward in coming days but will not fall below the level favored by the producers at $100 per barrel, according to Petroleum Policy Intelligence. The British foundation, specialized in oil issues, based its forecast on anticipation of possible closure of the key Hormuz strait by Iran and possible implementation of new plans to spur the American and European economies. "All these factors make it difficult to predict fall below the level of 100 barrels," the report said. Saudi Arabia has increased its production in June to 10.3 million barrels per day with a rise of 445,000 barrels in May, but this move did not ease off pressure on the prices. Drop of overall production by OPEC states in June by 106,000 barrels per day was due to international curbs imposed on Iran's oil exports. Prices nowadays are being affected with geopolitical, rather than technical, factors, the report said, forecasting drop of the Iranian oil experts by 300,000 bpd day in the near future, thus putting pressure on the other producers that would be compelled to hike the output. Oil prices fell Friday, snapping a string of seven straight higher settlements, as the euro zone debt crisis brought economic concerns back in focus and strengthened the dollar. Brent and US crude futures posted weekly gains of more than 4 percent, both contracts having touched eight-week peaks Thursday. Brent September crude fell 97 cents to settle at $106.83 a barrel, after falling as low as $105.60 intraday. Front-month Brent jumped 4.33 percent for the week, posting a fourth straight weekly gain and having risen 16.5 percent in the period. Expiring US August crude fell $1.22 to settle at $91.44 a barrel, off its low of $90.66. For the week, US crude rose 4.98 percent. US September crude fell $1.14 to settle at $91.83 a barrel. Volumes were tepid at less than half a million lots traded each for Brent and US crude, as dealings lagged 30-day averages. – Agencies
