[DUBAI] Oil has bottomed with global economic growth and increased demand leading to higher prices than previously expected, according to JPMorgan Chase & Co Goldman Sachs Group Inc is still bearish.
The West Texas Texas Intermediate oil price forecast was raised to US$54 a barrel for 2015 and to US$59 for 2016, James Thompson, an analyst at JPMorgan in London, said in a report dated May 26. Goldman Sachs said in a report Monday oil would fall to US$45 by October, in part because of a stronger dollar.
"We believe that the oil price found a floor through the early part of 2015," Mr Thompson said. "There may be some upside to our 2015-16 forecasts for both WTI and Brent."
WTI has rebounded 40 per cent from a six-year low on March 18, surging into a bull market. Oil for July delivery fell 1.5 per cent to US$58.82 on the New York Mercantile Exchange on Tuesday. JPMorgan's Brent estimates were also raised to US$60 for 2015 and US$65 for next year.
The dollar will have "modest" further strength against major currencies, according to JP Morgan. Global economic growth will be "above trend" in 2016 and oil demand estimates are "edging higher," the bank estimates.
The Organization of Petroleum Exporting Countries meets next week in Vienna to discuss production targets. Opec decided to keep its output target unchanged at its last meeting in November, and the group will stick to that strategy, according to all but one of 34 analysts and traders surveyed by Bloomberg.
"Opec will continue along the path of winning market share," Mr Thompson said.