Oil prices have been boosted by hopes of additional global policy stimulus and fears of a worsening of geopolitical tensions in the Middle East, but we expect these supports to be shortlived. Possible triggers for a substantial correction include disappointment at the impact of QE3, renewed weakness in the US economic data, a further escalation of the crisis in the euro-zone, and releases of crude from official stocks. Barring a military confrontation with Iran, we continue to expect the price of a barrel of Brent to end this year below $100 and to fall further in 2013.
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