NEW YORK: Oil prices are expected to fall slightly over the next year as high production feeds softening demand at a time of slowing global economic growth, a poll shows.
An oil price survey of 29 analysts forecasts North Sea Brent crude oil will average $107.50 per barrel in 2013, down $1.30 from the forecast in the October poll and compared with an average of around $111.90 so far in 2012.
Five analysts now expect Brent to average less than $100 in 2013, compared with three in last month's poll.
Only three analysts forecast Brent will average more than $115 next year, compared with five analysts last month.
"We are notably bearish on the near term oil price environment given that we see a fundamental oversupply of oil," said Raymond James analyst Praveen Narra, who has the lowest 2013 Brent price forecast of $80 per barrel in the poll.
Gain Capital Group analyst Chris Tevere is also bearish:
"Our overriding outlook continues to foresee slowing global growth (which) consequently should persist in undermining (oil) demand," Tevere said.
The Organisation for Economic Co-operation and Development has cut its outlook for global growth, reducing its forecast for 2013 to 3.4 per cent from 4.2pc, saying the euro zone debt crisis was a serious threat to the world economy.
Many analysts argue loose monetary policies being followed by leading central banks should keep a floor on oil prices, and geopolitical tensions may lead to price spikes, but most say upside risks have diminished.
Barclays had the highest Brent price forecast in the poll with $125 per barrel for 2013.
Analysts also saw a narrowing of the Brent/WTI spread due to easing geopolitical tensions in the course of next year. The poll projected a spread of $12.8 for next year.
"New pipeline capacities in the US should help to reduce oversupply in the US Midwest and to narrow the price gap between Brent and WTI next year," said Commerzbank senior oil analyst Carsten Fritsch.