RIYADH: Conflicting pressures on crude markets are to be the hallmark, as 2012 begins. The overall market fundamentals are weak and the Eurozone crisis is still far from over.

In the meantime, the new, emerging crude frontiers too are impacting the global energy landscape with long-term consequences. And to top it off, the recent geo-political developments are pulling the energy world into the opposite direction.

The escalating tension between West and Tehran would keep energy pundits on edge for a considerable period of time.

If the Strait of Hormuz is blocked, as Iran has been contemplating and threatening, or even if an attempt is made to do so and is thwarted by sheer force, it would have catastrophic impact on oil markets and indeed the state of global economy. A major spike even if for a short period of time could not be ruled out.

And then on the other hand, the possibility of a recession in the EU is staring the global economies. This uncertainty and the consequent slowdown in global growth could see commodity prices take a hit in the near term.

And while these two, rather conflicting, events could send oil prices off the charts in either direction there are other specks of doubt hovering over the crude horizon. Increasing supplies from Libya and Iraq are coming on line faster than many thought.

In the meantime, the US is slowly adapting to conservation possibilities weakening the demand side of the global equation.

The Chinese dragon is also slowing down one can’t deny.

However, pundits seem divided. Some are painting a firmer market outlook. A Bloomberg survey of 27 oil analysts indicates West Texas Intermediate oil may reach an average of US$100 a barrel in 2012, topping the record high of US$99.75 set in 2008. The US benchmark is on course to average US$95 a barrel this year.

Goldman Sachs Group that in May 2008 projected the oil prices could climb to US $200 a barrel, is now forecasting Brent crude to average $120 a barrel in 2012 and Nymex crude to average $112.50. As per Barclays Capital forecasts, Brent is to average $115 a barrel in 2012 and Nymex crude, $110 a barrel.

Other major commodity banks such as Bank of America Merrill Lynch is projecting to average at US$108 and WTI US$101, Deutsche Bank feels Brent would touch US$115, whereas, WTI would be around US$105. And Standard Chartered Bank says Brent to average US$107.5 and WTI: US$100.25 during the year.

The London based Centre for Global Energy Studies (CGES) is predicting an average Brent price of $111 for 2012 as a whole.

While this would still be a record annual average, it puts oil prices only slightly ahead of their current level.

However, CGES also points to the unknown impacting the overall scenario. It argued that in case the global crude demand falls among the leading economies, and is not offset by growth in emerging nations, the average could slump as low as $76. And this is a big possibility for 2012. There are indeed too many unknowns impacting the overall equation.

And indeed there is a host of pundits on the other end of the spectrum too. Capital Economics expects Brent to slide to US$88 this year, Petromatrix believed it would hover around US$88.75 only in 2012 and Bernstein expected the Brent to be around US$90 in the year.

Morgan Stanley is also projecting Brent to trade below $90 for the first half of 2012, in case the current crisis in the eurozone leads to a painful recession.

The state of global economy and the geo-political considerations would be weighing heavily on the markets in 2012. And until the decks are cleared, nothing could be said with certainty. Non-fundamentals are to determine the course of the market, this year. Welcome to the New Year!