Merrill Lynch slashes 2009 oil price forecast to $50

BANK OPINION: Merrill Lynch has slashed its oil price forecast for 2009 to $50. (Getty Images)

Merrill Lynch on Wednesday cut its 2009 oil price forecast to $50 a barrel from $90 amid the global economic slump.

The US bank also lowered its 2010 forecast to $70 a barrel from $100 on fears that OPEC will be powerless to support the market as fuel demand falls, newswire Bloomberg reported.

Oil prices have tumbled more than 65 percent from a July record of more than $147 a barrel, to trade near $51 on Wednesday.

“We doubt OPEC can materially alter either market fundamentals or sentiment near-term,” Merrill analyst Alastair Syme in London said in a report published by Bloomberg.

“In a rapidly falling demand environment we see little that suppliers can do to either reverse sentiment or tighten market fundamentals.”

Merrill’s $50 estimate for 2009 prices will be the second- lowest among 32 analysts tracked by Bloomberg after Australia and New Zealand Banking Group Ltd.

The median forecast among analysts for 2009 average West Texas Intermediate crude prices is $75.40 a barrel. That 2009 median estimate had peaked at $120 during July when oil prices were at their highest.

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READERS' COMMENTS

oil at 50 - i believe oh lord as ML has spoken
Posted by samer, dubai, uae on Wednesday 26 November 2008 at 19:38 UAE time


hell yeah, haven't they learned their lesson yet?
it is useful to read articles about supply, demand, and market conditions, but to make price predictions - please spare us.
if the problem is not with the prediction itself, then, it has to be with the conviction and belief they would seem to have in such predictions when they publish them.
every research letter these houses publish has an attached disclaimer longer than the letter itself saying the genius who wrote this letter could be wrong.
all in all, and this is mostly to publishers of this and similar publications, please stop helping such houses control or influence market sentiment with meaningless market predictions that change directions faster than a bellweather.

yeah right.
Posted by Mohammed Khalil, Dubai, UAE on Wednesday 26 November 2008 at 15:12 UAE time


No one in the world can tell you what oil will be tomorrow, let alone 2009. And anyone who takes this seriously is an idiot. These banks have a failed track record at trying to forecast oil prices. They usually see the current oil price and increase it by a certain percentage, or pull a number out of a hat, that's all that makes sense to me. When oil was at around 140, Goldman Sachs was saying it would reach 250 in less than a year's time. Give me a break!!

merrill lynch
Posted by sammy, dubai, uae on Wednesday 26 November 2008 at 14:28 UAE time

when will we ever stop thinking that merrill and the likes of merril have that insight.
they know about tomorrow as much as joe the plumber does, because if they did, things would have been different for all of us, now wouldn't they?.
so oil will average 50 during 2009!
really!

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