London, Dec 20, IRNA-The Center for Global Energy Studies (CGES) has reversed next year's average oil price forecast back up to over 57 dollars per barrel after OPEC's agreement last week to make further quota cuts from February.
Using the case presented by the International Energy Agency, the London-based center predicted that the price for benchmark Brent crude could even average 70.7 dpb for 2007.
Last month, it drastically cut next year's forecast to 49.9 dpb from 58.7 dpb it estimated in October. But this was reversed back up to 57.7 dpb in its latest reference scenario.
"OPEC's obsession with output cuts is being driven by its bearish view of the need for its oil next year," CGES warned following the 11-member organization reassessing its own year-on- year changes in oil demands and non-OPEC supplies.
But it said it was not convinced of the need for the cuts announced in Abuja last week and did not believe that they would be implemented.
"In reality, the path of oil prices over the next few months will be determined to a large extent by the ability, and willingness, of Saudi Arabia to manage the market on its own," said the center, established by former Saudi oil minister Ahmad Zaki Yamani.
But instead of forecasting that Brent crude would fall to an average of 51.6 dpb in the first quarter of 2007 and 48.1 dpb in the second, it revised its predictions to 59.6 dpb and 61.4 dpb respectively.
In an IEA reference case, which sees demand growth barely being outstripped by incremental non-OPEC supplies, the prediction was that oil prices will continue to rise, instead of falling, reaching as high as 85.6 dpb by the final quarter.
For the remainder of this year, it expected Brent crude would average just over 60 dpb in the final quarter, making the annual average 65.2 dpb.
In earlier reports this year, CGES had forecast that oil price could average over 70 dpb for the rest of the year and even continue at over 80 dpb for the first half of 2007.
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