Oil prices expected to average over $80 next year


London : Oil prices are expected to average over $80 per barrel in 2011, some $5 higher than the likely average this year, according to the Centre for Global Energy Studies (CGES).

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In its latest monthly world oil report obtained by IRNA, the London-based centre forecast in its reference case that the average price of dated North Sea benchmark crude would rise to $83.6 next year, up from $78.3 expected in 2010.

With prices once again breaking $80, it believed this trend would continue in the final quarter of this year, before marginally falling to around $79 in the first two quarters of 2011 and then rebounding to $84 in the third quarter.

The reference case is based on the call on OPEC’s crude growing, as the increase in global demand begins to outweigh the rise in non-OPEC supplies and as a result the organisation raising its output to 29.8 million barrels per day by 4Q11.

Dated Brent was expected to rise more steeply as global oil demand gradually strengthens, with the price reaching $92 by the final quarter of next year.

In a higher price scenario, based on lower growth in non-OPEC oil output, Dated Brent would remain at an average of just over $80 before rising to $93.6 in the third quarter of 2011.

In the event of global oil demand growing at a slower rate next year, CGES suggested prices would gradually drop to an average of $71.6 by the middle of 2011 before recovering to $78.2 in the third quarter.

In the background, several OPEC member-countries are calling for a higher price target, although Saudi Arabia continues to refer to the $70-80/bbl range as ‘perfect’.