Brent to Go Down to $100: Analyst
Brent crude prices are likely to go down towards $100 a barrel as weak economic data around the world continues to hit demand, Stuart Joyner, oil and gas analyst at Investec, told CNBC Tuesday.
Brent was trading at around $109 on Tuesday, paring earlier gains, as economic growth in China was weaker in the third quarter, sparking worries about demand from the world's second-biggest consumer of oil.
China's gross domestic product advanced by 9.1 percent in the third quarter compared with 9.5 percent in the second quarter and with forecasts of 9.2 percent.
"I think it's a poor set of data, it's poor for crude," Joyner said. "We're possibly looking at flat year on year oil demand. Going into next year we could see 0 percent [demand growth] again."
"Brent looks quite vulnerable to me and I do expect Brent to come down closer to $100 a barrel next year."
There are still constraints on crude supply because of disruption in Libya but when the country boosts supply, possibly by the end of the first quarter next year, these constraints will be lifted, he predicted.
"The demand picture has been relentlessly negative for three or four months, ever since the OPEC meeting really," he added.
On the natural gas front, shale gas has a major potential in Europe, with an early find in the north of the UK and a new investment in Poland, but accessing these reserves will be more difficult in Europe than in the US because of the burden of regulation and the smaller scale of services for this industry, Joyner said.