Crude oil prices will decline in 2014, according to forecasts by Deutsche Bank AG (NYSE:DB). An email report on Tuesday said that the per barrel cost of U.S. West Texas Intermediate would fall from $98.59 to $88.75 next year. Bloomberg printed data from an email the bank sent. Brent, another key benchmark in oil prices, is also set to decline. Averages for 2014 will be $97.50 per barrel; in 2013, the averages were $108.91 a barrel.
High production rates in the U.S., and potential for increased output by Iran and Libya, caused Michael Lewis, Deutsche Bank’s head of commodities research in London to predict a “bearish environment” for oil exports in 2014. “We see the growing risk of an oil supply glut developing,” Lewis said.
BNP Paribas SA, Citigroup Inc. (NYSE:C), and Deutsche Bank all find that OPEC members will need to reduce output to prevent the market being oversupplied in 2014. “Downside risks to the oil price may require OPEC to cut production to defend oil prices,” Deutsche Bank stated. OPEC however, has no plans of cutting production.