By Stephen Voss
Nov. 14 (Bloomberg) -- BNP Paribas SA slashed its oil price forecast for next year by 21 percent and said weakness in demand will have the ``upper hand'' in determining prices for the next few quarters.
``The short-term fate of oil prices does not appear to have disconnected yet from the trends in equity markets, the de facto bellwether for the economic outlook,'' BNP's senior oil analyst Harry Tchilinguirian said in the research report, dated Nov. 13.
The bank expects West Texas Intermediate, the benchmark U.S. crude, to average $65 a barrel this quarter and $75 next year, which are lower by $12.70 and $20.20 than its previous forecasts from Oct. 10. BNP reduced its Brent crude oil forecasts, to $62 for this quarter and $73 next year.
It also cut its 2010 forecasts for WTI and Brent, to $89 and $87, which it said was based on forward curve spreads.
Prices will recover in the second half of next year as a result of ``sub par'' supply growth outside the Organization of Petroleum Exporting Countries, the report added. WTI prices will average $85 a barrel in the last quarter of 2009, it said.
To contact the reporter on this story: Stephen Voss in London at sev@bloomberg.net
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