Barclays Cuts Oil Price Forecasts (USO)

Barclays Capital BCS cut its oil price forecasts for this year and 2011 Thursday, citing economic recovery concerns. The United States Oil Fund ETF USO is up 0.8% this afternoon, to $32.64. Barclays cut its 2010 price forecast by $4, to $78 a barrel, and cut its 2011 forecast by $7, to $85 a barrel. "There is enough fundamental strength to support prices above the $70 which is increasingly looking like a minimum for the basic health of the industry, but there is also enough macroeconomic disquiet to make any breakout of prices to the upside difficult to sustain," the report said. According to a Reuters report, "Other forecasters have been trimming their price outlooks in the face of rising oil inventories—which are at a record high in top consumer the United States—and concern about the strength of economic recovery and future demand." Oil prices have declined considerably since breaking above the $80 mark earlier this summer. Prices have since dropped to below $75, amid an onslaught of economic reports indicating a slowdown of the global recovery. U.S. light, sweet crude is up $0.86, or 1.2%, today, to $73.38 a barrel.