US Bullish in 2005 Oil Price Forecast

The US government on Tuesday emerged as one of the most bullish forecasters of oil prices, raising its outlook for this year to nearly $50 a barrel.The report by the US Department of Energy pushed Brent crude futures, the European benchmark, to an all-time high in nominal terms of $53.20 a barrel.

This time last year, it predicted a price of only $29.40 in the forecast for 2005. The Department of Energy warned yesterday: “Oil prices are likely to be sensitive to any incremental supply tightness that appears during periods of peak demand worldwide. Imbalances in light product markets could cause light crude oil prices to increase to well above $50 per barrel, as has recently occurred.”