LONDON (Dow Jones)--Major banks kept their closely watched oil price forecasts unchanged for this year and next despite the fears of a double dip recession that have gripped equities markets in the past two days and pushed U.S. oil futures down 8%.
The banks say that tight oil supplies and rising demand will keep prices high well into 2012. Some said oil price forecasts weren't changing because they were based on already quite weak economic growth projections.
"Our economists don't believe in a double-dip recession," Barclays Capital oil analyst Amrita Sen said.
"Slowdown is not recession and we don't expect demand growth to get negative," she added.
Barclays Capital forecasts Brent crude to reach $115 a barrel by the end of this year and spike to $121 a barrel in the last quarter of 2012.
Goldman Sachs said that while the risk of recession in the U.S. and the downside risk for its forecasts have increased, U.S. oil demand numbers don't show signs that the economy has slipped back into recession.
"U.S. oil demand over the past three weeks has risen to the highest levels for this time of year since before the financial crisis, and the oil market supply-demand balance remains firm," Goldman Sachs said in a research note.
Goldman Sachs had forecast Brent to reach $120 a barrel by the end of the year and $130 a barrel next year.
Morgan Stanley analyst Elga Bartsch said the bank still expects oil prices to rise, as its bullish forecast was already based on a "pretty negative growth number" for the global economy. Morgan Stanley had the same oil price forecasts as Goldman Sachs.
Nymex crude futures have plunged 8% since Wednesday's close, crashing through $80 a barrel to reach a Friday low of $79.17 a barrel, tracking pummeting stock markets and currencies. In the same period, Brent crude futures have fallen 4% to a low of $105.06 a barrel.
-By Konstantin Rozhnov, Dow Jones Newswires; +44 207 842 9956; konstantin.rozhnov@dowjones.com
