Oil prices neared 27-month highs yesterday, and analysts are expecting the run to go on and on. A survey of analysts yesterday by Bloomberg found they expected 2011′s average price to be the second highest ever.
Today, Barclays Capital has added to that sentiment, producing its list of five predictions for the oil price for 2011. Not one of them reads well for consumers.
Here are the bank’s five expectations for this year.
Shares in BP hit a 6-month high this morning after a report that rival Royal Dutch Shell considered an opportunistic takeover bid for the UK oil group in the summer during the Gulf of Mexico oil spill.
BP’s shares were up 5 per cent to 488.85p at 10am this morning in London trading.
According to the report in the Daily Mail Shell weighed a bid while oil was still flowing into the waters of the gulf but decided against it because of the potentially uncapped legal liabilities facing BP. The paper says Shell might still bid for BP if another suitor emerges over the coming months but is unlikely to be the “first mover”.
The first London trading day of 2011 is proving to be a volatile one for oil explorers.
Cairn Energy is having a very good morning, its shares trading up 4.5 per cent after the company announced it had secured two rigs for its exploration off Greenland’s coast. The new rigs mean the company now forecasts it will drill up to four wells this year. Gordon Gray at Collins Stewart is quoted in the Guardian saying:
With rigs now contracted, we expect net asset value estimates for Cairn to rise as it gives details on target prospectivity in the coming weeks.