Crude oil may average 35 percent higher in New York next year and rise to $85 a barrel in 2011 as spending by governments boosts global demand.
Crude oil may average 35 percent higher in New York next year and rise to $85 a barrel in 2011 as spending by governments boosts global demand, Morgan Stanley said in a report. Benchmark crude futures on the New York Mercantile Exchange will likely average $48 this year and $65 in 2010, according to the report dated yesterday. Next year will mark the beginning of a recovery as governments" spending provide the stimulus to maintain the re-stocking phase of a new commodity cycle, it said.
Governments in the world"s biggest economies including the U.S., China and Japan have announced stimulus plans to boost growth. The world economy may expand 2 percent next year after shrinking in 2009, the World Bank said last month.
?With gasoline giving way and distillate stocks bloated, crude is facing some severe fundamental headwinds,? the report said. Barring further weakness in the dollar, we think crude"s upside is limited from here.?
Crude oil on the New York Mercantile Exchange was at $64 a barrel at 3 p.m. Singapore time. Crude futures reached an eight- month high of $73.38 on June 30.
Prices of natural gas in the U.S. may average $4.50 per million British thermal units this year and rise to $6.50 in 2010 and $8 in 2011, the report said. Benchmark gas traded in New York at $3.48.
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