Oil at $40 leaves forecasters poised to play catchup again

Forecasters have spent more than a year playing catch-up with the oil price. After Opec effectively abandoned crude-output limits last week, another round may be overdue.

As Brent crude futures crashed through $40 a barrel yesterday for the first time in almost seven years, analysts were still predicting average prices of $51 in the first quarter, according to data compiled by Bloomberg.

With Iran planning to boost output by about 500,000 barrels a day, record oil stockpiles continuing to expand and El Nino damping demand for heating fuel in the Northern Hemisphere, there are several reasons to expect such a recovery isn’t imminent.