Morgan Stanley: Oil prices to average $35 this year

20 March 2009

Crude oil prices are likely to remain "at depressed levels" throughout this year, before beginning to edge up again in 2010, a new report suggests.

According to US bank Morgan Stanley, values for London Brent crude will average just $36 (£25) a barrel during 2009 as the economic crisis continues to take its toll on the market.

The downturn has resulted in a significant drop in demand for oil across the globe, prompting prices to fall from highs of close to $150 last summer.

While the bank expects values to "eventually" reach triple-digit levels again, this is not expected to happen until the economy has recovered, which is unlikely to be before 2011.

Morgan Stanley said that prices could decline further during the second quarter of this year, before rising to reach an average of around $55 a barrel next year.

The forecast is likely to come as good news for home heating oil customers, who could see this year as the ideal time to take advantage of low crude prices by stocking up on supplies of the fuel.

London Brent crude rose $3.01 on Thursday to settle at $50.67 a barrel, while US crude settled up $3.47 at $51.61 a barrel.

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