Jose Botelho de Vasconcelos, president of Opec, said during an oil sector meeting in Ecuador on Thursday that prices were “more or less at an acceptable level” and that crude at $80 a barrel in 2010 would be “reasonable”.
Hussein Allidina, commodity strategist at Morgan Stanley, said further gains for oil prices were likely to be limited as physical demand remained weak and supportive macro factors would start to fade.
“A deluge of global liquidity has kept oil prices, along with other risky assets, moving higher since February,” said Mr Allidina. “With the end of [monetary] easing approaching, we envision a harder grind ahead, one where fundamentals will matter more.”
Morgan Stanley expects WTI to average $85 a barrel in 2010 as the market’s fundamentals should improve as growth in oil demand resumes.
However, Mr Allidina also cautioned that betting on further gains for oil prices was a “crowded trade” with the speculative net long position in WTI standing at a record high.