Societe Generale <SOGN.PA> has cut its 2008 and 2009 crude oil price forecasts, joining other banks in trimming estimates following a drop in prices from a record high hit last month.

The bank expects U.S. crude <CLc1> to average $113.78 a barrel in 2008 and $120.42 in 2009, it said in a research note dated Aug. 22. The previous forecasts were $124.78 and $128.75 respectively.

U.S. crude has fallen to about $116 a barrel from a record high of $147.27 last month, pressured by weaker demand in major consumers such as the United States and Europe and higher production from OPEC.

“The crude price correction has been caused by a combination of bearish market psychology, weaker fundamentals, and bearish financial flows out of commodities and oil,” Societe Generale analyst Mike Wittner said in the note.

A Reuters poll of analysts published last week showed a drop in the consensus forecasts for U.S. crude for the current year for the first time since early 2007. [O/POLL]

Source: http://www.afxnews.com

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