Bank of America Corp. (BAC) trimmed its Brent oil price forecast for next year to $108 a barrel from $114 because of lower global demand estimates.
The bank boosted its 2013 estimate for the crude to $118 a barrel, according to a report by analysts led by New York-based head of commodities research Francisco Blanch. Brent traded at about $109 on the London-based ICE Futures Europe exchange today. West Texas Intermediate, the U.S. benchmark contract, will average $101 next year and $111 in 2013, the bank said.
“The world economy faces a binary outcome -- bad or ugly,” Blanch wrote. “A mild recession in Europe is probably inevitable. On the other side, the supply picture is steadily improving.”
Global oil consumption will increase by 1 million barrels a day next year, Blanch said in a separate report yesterday. That’s 500,000 barrels less than the bank had predicted in July. Spare production capacity among Organization of Petroleum Exporting Countries will increase next year, while output outside the group will rise by 890,000 barrels a day, according to Bank of America.
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