Societe Generale cuts crude oil price forecasts

* SocGen says U.S. crude to average $92.30 in 2011

* Trims Q4 2010 average target to $85, Q3 to $80

* New 2015 price forecast of $114

By Joe Brock

LONDON, June 8 (BestGrowthStock) – French bank Societe Generale
(SOGN.PA: ) lowered its U.S. crude oil (CLc1: ) average 2011 price
forecast to $92.30 a barrel this week, down from $101
previously, due to slower than expected fuel demand recovery.

The bank also trimmed its third and fourth quarter 2010
price targets to $80 and $85 respectively as it expects
investment to be neutral for oil prices in the next few months,
before picking up towards the end of the year.

“Over the last 2 months, risk aversion has been sustained at
high levels across asset classes,” Michael Wittner, global head
of oil research at the bank said in a note to investors.

“However, by fourth quarter 2010 and through 2011, we expect
investor flows, on balance, to be moderately bullish, as oil and
other commodities provide exposure to growth in emerging markets
and also provide a hedge against inflationary pressures.”

Oil has fallen more than 17 percent since reaching a
19-month high above $87 at the beginning of last month as the
euro zone fiscal crisis raised doubts over the strength of
global economic recovery and future demand for fuel.

Societe Generale cut its 2011 average forecast for Brent
crude to $91.80, down from $100.25, while trimming its third and
fourth quarter 2010 targets to $79.33 and $84.50.

U.S. crude oil was trading around $71 on Tuesday with Brent
(LCOc1: ) futures at around a 50-cent premium.

Societe Generale are the second major bank to make
significant revisions to its targets since oil prices fell in
May, after Bank of America-Merrill Lynch (BAC.N: ) cut its
forecasts two weeks ago. [ID:nLDE64O0WI]

The U.S. bank lowered its U.S. crude oil price forecast for
the second half of 2010 to $78 per barrel from $92.

After next year, Societe Generale is bullish and expects
economic and oil demand growth to see a return to prices above
$100 in 2012 and beyond, the report on oil drivers said.

It forecasts an average price of $102.50 in 2012, rising
modestly to $106.50 in 2013 and $110 in 2014. The bank also
introduced a new average target for 2015 of $114.

“While the delays in the post recession rebalancing process
have caused us to push back our forecast price profile, the
bullish medium and long-term story remains the same,” Wittner
said in the report.

“Downside to oil production forecasts from the US Gulf of
Mexico would result in lower levels of OPEC crude spare
capacity, which would reinforce our view.”

Investing

(Editing by James Jukwey)

Societe Generale cuts crude oil price forecasts