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Forecast: Oil price will be $90 on average next year

04 December 2009 15:28 (UTC +04:00)

Baku. APA-Economics. U.S. investment bank Goldman Sachs expects oil prices to rise to an average $90 a barrel next year, before increasing to $110 in 2011, as strong growth in emerging market economies boosts crude demand, Reuters reported.

In its first major oil price outlook since June, Goldman maintained on
Thursday its earlier 2010 forecast for West Texas Intermediate futures CLc1
at $90 a barrel, citing factors such as slower-than-expected fuel demand
recovery in developed economies, which has kept global crude stocks high.

Goldman expects oil prices to rise to $110 a barrel in 2011 as supplies are
drawn down amid strong demand from emerging markets. The bank did not offer an
outlook for 2011 oil prices in earlier reports this year.

"Overall, we leave our 2010 WTI crude oil forecasts largely unchanged at an
average price of $90/bbl, but with lower prices at the start of the year and
higher prices at the end," the bank said in a report.

U.S. crude futures fell 33 cents a barrel to trade at $76.27 as of 12:01
p.m. EST (1701 GMT).

Goldman, which is among the most profitable commodities traders on Wall
Street, lowered its 2010 price forecast for NYMEX natural gas futures
to $6 per million British thermal units, down from a previous forecast
of $7.30. The bank expects natural gas prices to rise to $6.50/mmBtu in 2011.

NYMEX January natural gas futures NGF0 were trading around $4.50/mmBtu on
Thursday.

To explain the downward revision for 2010 natural gas prices, Goldman cited
higher-than-expected production of unconventional gas that has lifted supplies
in spite of recently flagging investment in drilling.