We expect WTI and Brent crude oil prices to rise above $100/bbl in 2011 as driven by strong global demand and decline in OECD inventories. In 2010, oil prices have been resilient in 2010 despite bouts of macroeconomic uncertainties throughout the year: sovereign crisis in the Eurozone, concerns about a double-dip in the US and inflationary pressures in emerging markets. Both WTI and Brent crude oil prices are expected to gain more than +10% this year while the US dollar will probably rise around +3%. Global oil demand has been exceptionally robust despite the headwinds, indicating improving demand/supply fundamentals. Oil demand probably grows +2.4M bpd this year. With a higher base this year, consumption growth in 2011 will moderate to +1.5 M bpd. While OECD demand will continue to show only modest growth, the major driver will again come from non-OECD markets.
