Oil May Drop Next Week on Europe Debt Concern, Survey Shows
Oil may fall next week on heightened concern that Europe’s debt crisis is spreading and will hurt demand, according to a Bloomberg News survey.
Spain yesterday sold 3.56 billion euros ($4.8 billion) of a new 10-year benchmark bond at an average yield of almost 7 percent, the most since the euro’s creation. Oil surged to a five-month high this week after Enbridge Inc. said it will reverse the direction of the Seaway pipeline, adding an outlet to transport from the central U.S. and Canada to the Gulf of Mexico coast.
“At a time of weak economic prospects and rising oil production, prices over $100 are likely to prove unsustainable no matter which direction you run the Seaway pipeline,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in an e-mail.
Eighteen of 36 analysts, or 50 percent, forecast oil will fall through Nov. 25. Eleven, or 31 percent, predicted a gain, and seven, or 19 percent, said there will be little change. Last week, 58 percent of those surveyed projected a drop.
Crude oil for December delivery fell $1.58 to $97.41 a barrel this week on the New York Mercantile Exchange, the first weekly loss since Sept. 30.
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 survey has correctly predicted the direction of futures 47 percent of the time since it began in April 2004.
Survey results: RISE NEUTRAL FALL 11 7 18
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