Risks to oil prices remain on the downside

The improvements in global economic conditions indicated by the latest manufacturing surveys, as well as the positive mood in financial markets, have already prompted us to revise our near-term oil price forecasts higher. Nonetheless, the upside from current levels should be capped by demand constraints and ample supply. The fundamentals are also likely to deteriorate again later in the year. We therefore still expect Brent to end 2013 below $100 per barrel, despite OPEC’s recent comfort with global prices of around $110.