N.Y. Oil to Average $92 to $96 a Barrel in 2012, Again Capital Forecasts

Crude oil futures in New York will average $92 to $96 a barrel in 2012 as slowing economic growth curbs fuel demand, according to Again Capital.

Prices may slip from 2011’s record average of $95.11 as the euro declines against the dollar amid the European debt crisis and uncertainty about the economic recovery, John Kilduff and Michael Fitzpatrick, Again Capital analysts based in New York, said in a Dec. 29 report distributed today.

“The austerity is going to be a problem for growth around the world,” Kilduff said in a telephone interview.

The strengthening of the dollar against the euro curbs commodities’ appeal as an alternative investment to U.S. currency.

Unrest in the Middle East may cause a supply disruption that could send prices to records above $150 a barrel, triggering a recession or depression, Kilduff and Fitzpatrick said. The analysts cited the possibility of civil war in Iraq and Libya and the threatened closing of the Strait of Hormuz by Iran.

Brent oil in London will average $100 to $105 a barrel this year, down from $110.91 a barrel in 2011, Kilduff said.

“If supply is suddenly shut in, the consequences could be devastating,” the analysts said in the report. “Price spikes to upwards of and beyond the 2008 high near $150 have been discussed, which if sustained, even briefly, would push Europe and the U.S. over the cliff into recession, possibly depression.”

Oil in 2011 reached its highest annual average price since trading began on the New York Mercantile Exchange in 1983. Futures for February delivery slipped 82 cents, or 0.8 percent, to $98.83 a barrel on Dec. 30.

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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