NEW YORK (Commodity Online): Morgan Stanley has revised down their metals price forecast for 2012, but remained bullish on Brent crude oil.
"Our bear-case scenario for 2012 and 2013 in particular reflects the downside risks in base metals and bulk commodities from this major growth risk. In general, we are negative on the metals with sizeable surpluses such as aluminium, nickel, lead and zinc”, it said in a report while adding that copper was the favoured metal in 2012.
Gold and Silver will continue to appreciate this year, but the scope of the gains will be lower than previously expected.
On Brent crude oil, the bank remained bullish. "If geopolitical tensions recede, the risk premium built into crude is likely to fade as the market's focus returns to fundamentals. On the other hand, if tensions escalate into production disruptions, prices are likely to surge materially higher, with the sustainability of the higher price dependent on the duration and magnitude of production disruption”
Brent crude price is forecasted at $100/barrel, which could fall initially to $85/barrel in the event of geopolitical tensions easing. The later half would see prices hit $110-$115/barrel on tight supplies.
