Print

Mail

wiki links

Deutsche Bank economist says oil prices to fall

Crude oil traders work the floor of the Mercantile Exchange in New York Thursday. Crude futures climbed above US$48 a barrel Thursday as market fears of sabotage against the Iraqi oil infrastructure outweighed assurances from Baghdad that exports would increase in coming days. PHOTO: AP

Skyrocketing crude-oil prices are likely to fall to below US$40 per barrel next year, a Deutsche Bank economist forecast.

Crude-oil prices may slip to between US$32 and US$33 per barrel next year, Norbert Walter, chief economist of Deutsche Bank Group, told members of the European Chamber of Commerce Taipei, yesterday.

Walter, 60, has been serving as managing director of the Frankfurt-based Deutsche Bank Research since 1992. He is also a member of an inter-institutional monitoring group for securities markets appointed by the European Parliament and the European Council in 2002.

Walter attributes the soaring price of crude to rising consumption by India and China, and to inefficient energy utilization in the US.

The terrorism threat in Iraq and Saudi Arabia, two of the world's major oil producers, is another reason for high crude prices, Walter said.

New York's benchmark light sweet crude for delivery in September climbed US$0.10 to US$48.80 in electronic trading after hitting an all-time high of US$48.98 in Asia.

Walter said that global economic growth for next year may need to be trimmed down by 0.5 of a percentage point if the crude oil price remains around US$40 a barrel.

Last month, Deutsche Bank forecast that the global economy will grow 3 percent next year, following a 3.5 percent advance this year.

JP Morgan Chase & Co on Thursday forecast that West Texas Intermediate crude prices will average US$42.5 per barrel this quarter, up from US$37 per barrel.

The US investment bank also revised upward its fourth-quarter forecast to US$41 a barrel from US$38.

The Deutsche Bank economist said that he continues to be bullish about this year's economy, saying that the US and China would work to promote growth.

"[Beijing] is not interested in chilling its economy," Walter said.

If China does not allow its interest rates to rise and its currency to appreciate, its economy may expand for another four years, he said.
This story has been viewed 3392 times.