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.