London, Oct 20, IRNA - The Center for Global Energy Studies (CGES) Monday further cut its oil price forecasts, suggesting that the rate for benchmark Dated Brent would most likely drop to an average of 63.1 dollars per barrel (dpb) for next year.
The reference case price in the center's latest monthly report was predicted on a slowing world economy and a concomitant reduction in oil demand growth.
In an even bleaker economic scenario, it suggested that Dated Brent will average only 47.5 dpb in 2009 if global oil demand shrinks by 200,000 barrels per day (bpd) from this year's level.
A higher price average of 82.7 dpb was forecast only in the event of OPEC making substantial production cuts of 1 million bpd by the start of 2009 and by a further 500,000 bpd in the second quarter.
CGES said that with the price of crude oil falling fast, OPEC was in a dilemma when it meets later this week to stop the slide while the world was in deep economic crisis, but believed production cuts would be agreed to prevent a price collapse.
"OPEC will gave to decide how far it can ignore the global economic crisis and pressure from consuming countries not to try to reverse the recent price falls," it said, pointing out that the real danger is that a big cut will send rates soaring again.
In September, CGES forecast in its reference case that Dated Brent would continue to average over 100 dpb until the end of the year before dropping to an average of 85.9 dpb in 2009.
In June, it had warned that prices would reach and average of 150 dpb by the start of next year if Saudi Arabia fails either to increase its oil production or price the increased supply realistically.
... Payvand News - 10/20/08 ... --