Oil price estimate upped

28 February 2008

Barclays Capital has reassessed its oil price estimates, increasing the amount it expects the commodity to be worth.

The bank has pushed up its forecast for the year ahead by $10 (£5) per barrel, Reuters reports.

Following yesterday's announcement that oil prices have hit $101a barrel - a new record high, the bank is expecting the average price of the commodity to reach $97.70.

Brent crude oil price predictions have been raised to $96.40 a barrel.

"Global distillate markets look like raging bull markets, given the extent to which the incremental global demand barrel is dominated by distillates," the news source reports the bank as stating in a research note.

Barclays added that demand in China is improving, as well as in other non-Organisation of Petroleum Exporting Countries (OECD) countries while demand in OECD nations continues to fall.

It was suggested by Bloomberg last week that increased demand for crude oil by China and India will cause a "supply crunch".

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