Oil May Rise Next Week on Mideast Unrest, Saudi Output Cuts, Survey Shows
Crude oil prices may increase on speculation unrest in the Middle East will curb exports as Saudi Arabia reduces production, a Bloomberg News survey showed.
Fifteen of 33 analysts, or 45 percent, forecast crude oil will increase through April 21. Nine respondents, or 27 percent, predicted prices will decline and nine projected little change. Last week, 49 percent of respondents said futures would gain.
Prices have advanced 18 percent this year as unrest spread from Tunisia to Egypt, Libya, Yemen, Bahrain and Syria. Iran may be helping Syria’s government suppress political protests, U.S. State Department spokesman Mark Toner said yesterday in Washington. Human Rights Watch said in an April 12 report that at least 130 people have been killed in the Syrian crackdown.
“There are no signs that the situation in the Middle East is getting any better,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “Syria is looking downright ugly right now.”
Countries in the Middle East and North Africa were responsible for 36 percent of global oil production and held 61 percent of proved reserves in 2009, according to BP Plc, which publishes its BP Statistical Review of World Energy each June.
Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, reduced its crude oil output in April by 300,000 barrels per day, John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi, said yesterday in a telephone interview.
“The Saudi headlines are a major worry,” O’Grady said. “It’s a big deal.”
Crude oil for May delivery fell $3.13, or 2.8 percent, to $109.66 a barrel this week on the New York Mercantile Exchange. Futures are up 28 percent from a year ago.
The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.
Bloomberg’s survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
15 9 9
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
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