Dubai’s crude prices may stabilise in H2, says KEEI

SEOUL — A drop in overall demand for crude and greater production are expected to help stabilise oil prices in the second half of this year, aSouth Korean state-run think tank the Korea Energy Economic Institute (KEEI) said yesterday in a report release to the media.

By (Wam)

Published: Tue 24 Jun 2008, 12:01 AM

Last updated: Sun 5 Apr 2015, 1:12 PM

The price of benchmark Dubai crude, which makes up the bulk of South Korea's oil imports, could reach $107 per barrel from july through December. It added the average price for 2008 could hover at around $105. The amount is a sharp increase from an average $68.43 per barrel for all of last year, but lower than the $126.29 reported for the first 20 days of this month and average $119.50 in May.

The KEEI said it based its predictions on the likelihood that the world economy may experience a slowdown in the coming months, caused in part by weaker US economic growth and cutbacks in fuel subsidies among many southeast asian countries.It also said new oil fields that will start full-scale commercial production in the United States, Sudan and Brazil should increase daily output by around one million barrels.

In addition, the think tanks said a stabilisation of the exchange rate could help keep crude oil prices down. Experts have claimed the weakness of the greenback contributed to higher fuel crude prices because oil exporters tended to raise prices to make up for a drop in the buying power of the dollar.

The energy research institute, however, said unforeseen developments like political unrest in the middle east and other oil-producing regions along with natural disasters could hike prices.

It said in the worst case scenario, average prices for the second half may hit $140 per barrel with the price for the entire year averaging $121.—

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