NEW YORK, Sept 28 - J.P. Morgan (JPM.N) raised its forecast for 2010 oil prices by $1 a barrel to $68.75 and by $5 a barrel to $70 for the fourth quarter of 2009, according a monthly report released last week.
"We continue to expect prices to remain range bound...we think OPEC will continue to produce, limiting our upside risk and as such, we've only made a only modest upward revision our price (forecast)," said Sung Yoo, oil strategist at J.P. Morgan on a conference call Monday.
Crude demand is will likely be pressured by low refinery runs as refiners try to draw down the current glut of products inventories, he said.
However, escalating tensions between the West and Iran over that nation's nuclear program could stoke concerns over disruptions to crude supplies.
Additional sanctions on Iran, including restrictions on gasoline sales to the country, could prompt the country to retaliate by reducing crude oil output.
"If there was a reduction of Iranian crude output, it would be kind of muted given that OPEC currently has over 5 million barrels per day of spare capacity," Yoo said.
"The biggest risk would be any retaliation to the exports traveling through the Strait of Hormuz," he added.
Some 40 percent of the world's globally traded oil passes through the Strait of Hormuz.
"We continue to expect prices to remain range bound...we think OPEC will continue to produce, limiting our upside risk and as such, we've only made a only modest upward revision our price (forecast)," said Sung Yoo, oil strategist at J.P. Morgan on a conference call Monday.
Crude demand is will likely be pressured by low refinery runs as refiners try to draw down the current glut of products inventories, he said.
However, escalating tensions between the West and Iran over that nation's nuclear program could stoke concerns over disruptions to crude supplies.
Additional sanctions on Iran, including restrictions on gasoline sales to the country, could prompt the country to retaliate by reducing crude oil output.
"If there was a reduction of Iranian crude output, it would be kind of muted given that OPEC currently has over 5 million barrels per day of spare capacity," Yoo said.
"The biggest risk would be any retaliation to the exports traveling through the Strait of Hormuz," he added.
Some 40 percent of the world's globally traded oil passes through the Strait of Hormuz.
