Deutsche Bank Cuts Oil Price Forecast to $97.50

Deutsche Bank reduced its price forecasts for Brent and West Texas Intermediate crude this year as “rampant” increases in crude supply from U.S. shale resources will help create a glut of oil.

The German bank cut its 2014 forecast for Brent to $97.50 a barrel, from $106.25, and its estimate for WTI to $88.75 a barrel, from $98.75, according to an e-mailed report today. A recovery in Iranian oil exports, should sanctions be resolved, is a “non-negligible” risk for this year, the bank said.

“A third year of rampant U.S. oil supply growth propelled by tight/shale oil development combined with the potential for the normalization of Iranian oil exports is increasingly painting a picture of an oversupplied global oil balance,” Soozhana Choi, a markets research strategist for the bank in Washington, wrote in the report. Such a balance “poses meaningful downward pressure on oil prices,” she wrote.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza