London, June 23, IRNA - If Saudi Arabia fails either to increase its oil production or price the increased supply realistically, Dated Brent will reach an average of Dlrs 150 per barrel (dpb) by the start of next year, according to the Centre for Global Energy.
In its latest monthly oil report, CGES said it was clear that Saudi Arabia was the only possible source of supply if global demand for crude oil in 2008 is to be met without prices rising much further, given the downbeat assessment of non-OPEC production.
Its high price scenario of Dated Brent reaching 150 dpb from an averaging 124 dpb in 2008 was some 20 dpb higher than in its reference case in which prices would reach an average of 133.8 dpb in the third quarter before easing to 131.4 in the final quarter.
The London-based centre blamed a continuing tightening of fundamentals for prices reaching almost 140 dpb earlier this month, including strong global demand and disappointing non-OPEC production, leaving stocks lower than anticipated.
It also warned that even with Saudi Arabia increasing production, the price of crude oil could still reach new record levels if demand strengthens more strongly than expected over the remainder of the year.
Its reference case was based on an increase in Saudi Arabian production and continuing robust demand for crude oil from outside the OECD, notably from China, India and Latin America, in which it forecast modest global demand growth of 0.7 per cent in 2008.
Even in its low price scenario of a slump in global demand, CGES predicted that benchmark Dated Brent would average 125 dpb in the third quarter of this year, before falling to 108.7 dpb in the final quarter and down to 88.4 dpb in the first quarter of 2009.
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