---

Denmark-based A/S Global Risk Management has forecast a 'slight increase' in oil prices over the next year.

Global Risk estimates that the average Brent price over the next year will be at $112.5. The company says that increasing demand from emerging markets is more than offsetting the decrease in OECD demand and that the major geopolitical dark horse for oil prices in 2013 will be the sanctions on Iran and the tense situation in Syria.

Commenting on oil market prices, Hans Erik Christensen, Managing Director, said: "2012 was a year of extremely fluctuating oil prices - from $128 in February to $88 in June. The present outlook does not give me any reason to believe that oil prices will be less volatile this year. If you wish to be certain your budget is not affected by the fluctuations, I recommend that you lock away your exposure; for instance with a customised hedging solution. Play it safe!”

The Global Oil Strength Index (GOSI)

The Global Oil Strength Index, or GOSI, was introduced by Global Risk in 2010. The GOSI is a single number between 0 and 100 that signals Global Risk Management’s expectations for the development of oil prices. A reading below 50 indicates a declining trend and above 50 an increasing trend.

Global Risk calculates the GOSI by assigning a strength rating or index for each of three factors (Fundamentals, Financials and Geopoliticals) and then calculating a weigthed average based on the three strength ratings.

Fundamentals: Rating: 60 (-5 vs Oct 2012). According to the report, increasing demand from emerging markets is more than offsetting the decrease in OECD demand. Fundamentals are therefore set as moderately bullish.

Financials: Rating: 55 (-5 vs Oct 2012). Global Risk says that the 'fiscal cliff' in the U.S. looks more like a pothole than a cliff. Financials are set as slightly bullish.

Geopoliticals Rating: 70 (-5 vs Oct 2012). The report concludes says that Western sanctions on Iran and unrest in Syria remain the wildcards for oil prices in 2013. Geopolitics are set as neutral to slightly bullish for oil prices.

GOSI - Rating: 62 (-5 vs Oct 2012) - The GOSI remains above the 50 level, indicating that Global Risk's oil price expectation is bullish.

Average price forecasts:

Brent Crude (US$ per barrel)

Q1 2013 - 110
Q2 2013 - 112
Q3 2013 - 113
Q4 2013 - 114

3.5% Rotterdam Barges (US$ per tonne)

Q1 2013 - 597
Q2 2013 - 622
Q3 2013 - 641
Q4 2013 - 648

0.1% CIF NWE Cargoes (US$ per tonne)

Q1 2013 - 946
Q2 2013 - 969
Q3 2013 - 969
Q4 2013 - 963

380cst Singapore Cargoes (US$ per tonne)

Q1 2013 - 622
Q2 2013 - 648
Q3 2013 - 673
Q4 2013 - 673

0.5% Singapore Gasoil (US$ per tonne)

Q1 2013 - 916
Q2 2013 - 931
Q3 2013 - 946
Q4 2013 - 946

3% US Gulf Waterborne (US$ per tonne)

Q1 2013 - 591
Q2 2013 - 616
Q3 2013 - 635
Q4 2013 - 641

N2 Heating Oil (US$ per tonne)

Q1 2013 - 945
Q2 2013 - 965
Q3 2013 - 960
Q4 2013 - 952