Crude prices 'to fluctuate in the range of $50-$60'

Oil prices are projected to fluctuate between $50 and $60 until the end of the first quarter of 2009, according to a market expert.

The current credit crunch and financial crisis created high volatility in global markets and this reduced expectations for oil prices in the short-to-medium term, Fadi Mehdi, senior associate, the Middle East Desk, at Saxo Bank, said. "We review our assessment of market regularly and currently we expect oil prices to be at the level of $50-60 per barrel until next year. Markets are worried about the impact and magnitude of the recession in the US economy. This created high expectations that demand on oil will decline in the US, the largest consumer of oil, despite increasing demand from other areas such as China and India," he told Emirates Business. He said the global economy was facing sharp turmoil that created uncertainty about commodities prices. "Gold and precious metals are facing the same situation and their prices will decline on the next few months. Even soft commodities including food stuff will face the same trend. Prices will continue in these levels until there is a clear vision about the directions in the world economy and the markets. We expect the markets will take some time before they reach their bottom and change their trend to the upward again," Mehdi added. He also expected slowdown in the growth of forex trading in the Middle East region. "After the financial crisis, we expect the growth to slowdown due to the lack of liquidity and lack of confidence among investors."
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