EIA predicts $50 barrel for next year

The Energy Information Administration (EIA), the statistical office of the US department of energy, has increased its oil price forecast for the last two quarters of 2005, repeating its position that prices for West Texas Intermediate crude oil will stay above $50 per barrel for the rest of this year as well as next year.

The EIA had previously predicted price levels of $51.58 per barrel in the third quarter and $53 per barrel in the fourth quarter. Its new forecast is for WTI prices to be $52.83 per barrel in the third quarter and $55 per barrel in the fourth quarter.

This forecast, however, had little influence on the futures market. Of more immediate concern were anticipation of Wednesday’s US crude oil inventory figures, which are predicted to show further increases in inventories, as well as anticipation of production policy decision due out of a meeting of OPEC in Vienna next week.

IPE Brent July contracts fell 49 cents at late afternoon in London, to $53.18 per barrel, adding to yesterday’s 50 cent decline. July delivery West Texas Intermediate lost 57 cents in early afternoon trade in New York, to $53.92 per barrel. This was on top of a 54 cent decline on Monday.

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