(EnergyAsia, July 31 2012, Tuesday) — US WTI crude prices could again exceed US$100 a barrel while Brent looks to reclaim US$110 in the coming weeks as pressure grows on the US and Eurozone governments to inject another round of stimulus into their flagging economies, and military tensions resume in the Middle East.
After slumping to eight-month lows in late June with WTI skidding to around US$77 and Brent to US$90, crude prices have staged a steady recovery. WTI has risen above US$90 and Brent has surged to over US$106 a barrel, with both looking to hold onto recent gains.
With the Western economies sinking into recession again, traders speculate that the US Federal Reserve and the European Central Bank along with the Chinese government are considering new stimulus measures.
Both OPEC and the International Energy Agency continue to forecast global oil demand to register growth of more than 1% this year despite the constant drumbeat of bearish economic news. The forecast for growth is in itself a bullish factor for the oil markets that has kept prices from falling too fast and by any significant amount.
The continuing civil war in Syria with the possibility of hostilities spreading to the rest of the region pitting Iran against the West are providing a firm and powerful support for oil prices.
Oil’s recovery began early in July when Norwegian oil workers went on strike to demand better compensation. Brent surged back above US$100 a barrel during the course of the strike action, and gained strength over the course of July.