Weekend Edition: Crude Oil Price Forecast Trimmed

On Friday, First Energy Capital Corp. trimmed its 2012 average price outlook to $91 US /barrel down from $105 US/barrel citing numerous non-fundamental financial and macroeconomic factors that will act as a drag on oil prices.

That is not surprising at all given a slowing global economy, European uncertainty and ample supplies coming out of OPEC which has decided to keep the same output level. Saudi Arabia has ignored calls to cut back on supply as they see the oil price decline as “a kind of stimulus” for the world economy. I think there’s more to it than being nice to the world economy. Let’s see, among those who complained about oil prices were the Iranians:

“We object to the drop in prices,” said Iranian Oil Minister Rostam Qasemi.

It’s not a secret: Saudi Arabia hates Iran! The Saudis are enjoying hurting Iran with lower oil prices on top of its sufferings from lower volumes due to the coming embargo which goes live on July 1. Then you have elections coming up in November, lower gas prices in an election year? A favor between allies!

Finally, the embargo may end up supporting oil prices at the current level where I see a floor forming. The $80-$90 range for WTI is great for producers and consumers. Up here we need the price differentials for the Canadian E&Ps to narrow and we’ll do just fine.

News Roundup

Apache discovers huge shale gas reservoir in northern B.C.

Calgary junior producer Trafina Energy loses debt battle

Head in the sand, OPEC sees no oil shale threat

OPEC to maintain oil output as Saudi ignores calls to cut back supply

Conoco CEO Sees North America Energy Self-Reliant In 2025

Blog Roundup

Investing in Natural Gas Stocks ETF (Oil and Gas ETFs)

Freelancing Revenue Report: My First Three Months in the Trenches (Invest it Wisely)

My plan for a prolonged low interest rate environment (My Own Advisor)

Why Are Europeans So Skinny? (101 Centavos)

Zynga Stock: Can You Play the Long Poker Odds? (The College Investor)

Have a Great Weekend!