Oil prices could be back up at USD 110 per barrel by the end of the year if we see more quantitative easing in the United States and with an EU embargo on Iranian oil imports, according to Harry Tchilinguirian, Head of Commodity Markets Strategy at BNP Paribas.
"Essentially we've been having very weak PMI data both in the US and in China, that`s fueling expectations of further monetary policy stimulus," he told CNBC's "Worldwide Exchange".
"At the same time of course we still have Iran in the headlines and that`s going to have importance in the second half of this year," he said.
As well as the recent ISM Index data in the US pointing to a slowdown, Tchilinguirian also mentioned weak labor market trends.
If Friday's release of non-farm payroll data is disappointing he expects oil prices will be pushed higher.
"We`re certainly looking for a higher oil price through the balance of this year and we could easily see WTI (US crude) return to an average of USD 90-95
Asked about the spread between WTI and Brent, he said: "We're assuming that we`ll have on average a spread between USD 10 to USD 15 and so the movement will be contained within that."
"We do not see a return to parity between the two crudes just because we have so much surplus light oil in the US," he said.
Oil prices in June were lower than three months ago. Brent Crude fell to below USD 90 per barrel, its lowest level in eighteen months.
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