Royston Parker Say Oil May Test $100 by Year-End as Global Recovery Strengthens

Online, October 22, 2012 (Newswire.com) - Some of those surveyed also said U.S. crude futures may challenge $100 a barrel before the year is out.

Two-thirds, or four out of six respondents, said prices will rise this week. One forecast a decline while one expects prices to remain unchanged.

Brent crude however, slipped by a little over $2.00 a barrel last week. Goldman Sachs, in a note to clients on Thursday, cut its Brent price forecast for 2013 to $110 a barrel from $130, citing an increasing outlook for supply outside of the Organization of the Petroleum Exporting Countries.

Still, short term outlook remains positive, supported by recent global economic data while supply disruption threats from the Middle East are providing a continued bullish theme.

"The world economy will be upward looking and global demand will rise," said Michael Francis, chief investment officer at Hong Kong based Royston Parker, who helps manage assets totaling about $2.1 billion, and has a 'bullish' recommendation on oil. "Geopolitical risk remains. Prices are headed higher."

U.S. builders started construction on homes in September at the fastest rate since July 2008 and made plans to build even more homes in the coming months, according to Commerce Department data last Wednesday.

"The Housing Index in the U.S. is strongly outperforming the S&P 500, along with the Banking Index holding up," said Dhiren Sarin, chief technical strategist, Asia-Pacific at Barclays Capital. "We view these as leading sectors for improving market sentiment in general. Crude oil should remain well supported as Brent returns towards the $114.30/$115.00 area."