CS Energy Brent August 2013

Commodity Spotlight Energy

Unexpected supply shortfalls drive up price of Brent oil

The Brent oil price rose to a 4½ month high of USD 111.5 per barrel in mid-August. The price has been driven by a combination of production shortfalls and stronger demand. Despite a continuing abundant supply of oil production outside OPEC, the oil market has therefore narrowed, which is leading to an increase in Brent forward contracts with short-term maturities in particular. The price rise is also being boosted by growing interest from financial investors. That said, the potential increase should be limited by the fact that the supply situation looks set to remain comfortable in the medium term. We expect the price of Brent to increase to USD 112 by year-end and to USD 115 next year.

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