Credit Suisse cuts Q3 and Q4 oil price forecasts
LONDON (Reuters) - Credit Suisse has cut its price forecasts for U.S. crude oil for the third quarter and fourth quarter of 2008, in response to falling demand and the stronger dollar, it said on Monday.
Credit Suisse cut its third quarter 2008 U.S. crude oil forecast to $120 per barrel from $130 previously.
It cut its fourth quarter 2008 forecast to $110 per barrel from $130. The bank left its price forecast for 2009 unchanged at $110 per barrel.
It pointed to evidence that demand destruction is picking up outside the United States, the world's largest energy consumer, where oil demand has already softened.
"The oil market has fallen rapidly out of love with the emerging Asia growth story, particularly after another weak reading on the China PMI index in August," it said.
"We think both the European and Pacific OECD have potential to provide a negative surprise in 2H08 and 1H09."
A rebound in the U.S. dollar was also putting pressure on oil. "The relationship between the U.S. dollar and the oil price is controversial, but as the U.S. dollar strengthens, the oil price falls."
The Swiss bank joins a growing list of investment banks, including Lehman Brothers and BNP Paribas, that have cut some of their oil price forecasts.
But Goldman Sachs equity analyst Arjun Murti, one of the first analysts to predict a "super spike" in oil to $100, has left his forecast unchanged at $130 a barrel for the fourth quarter of 2008.
Oil prices have fallen rapidly from a record peak of $147.27 a barrel on July 11. U.S. crude stood at $107.91, down $1.68 a barrel by 1208 GMT on Monday.
(Reporting by Jane Merriman; editing by Anthony Barker)
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