Singapore, 5 July 2010

Barclays Capital lowered its 2010 oil price forecasts for the first time in 16 months, citing persistent weak economic indicators and concerns of a slowing global recovery that overshadow rising demand for energy. The bank expects Americas benchmark West Texas Intermediate (WTI) and European Brent to average $82 a barrel this year, $3 lower than the previous forecast for WTI and $2 lower for Brent, mainly because of expected lower consumption in the fourth quarter.

"The grim external sentiment is likely to hang over the oil market like a sword of Damocles," Barclays said in the report dated July 2.

"In turn, that is capping the short-term upside, and severely slowing the price progression up to something more befitting the current state of oil market fundamentals."

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