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Nikkei Skids 4% After Weak China PMI

POLL-U.S. crude oil to close gap on Brent in 2013

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Published: Monday, 28 Jan 2013 | 6:00 AM ET
By: Shruti Chaturvedi

* Brent crude oil seen averaging $109.70 in 2013

* U.S. light crude to average $96.40 next year

* Increasing supplies may pressure Brent

* Saudi Arabia set to keep check on downside

* For a table of forecasts, see

Jan 28 (Reuters) - U.S. light crude oil futures are likely to outperform Brent this year, a Reuters poll of analysts shows, as increasing global supplies and economic uncertainty weigh on the North Sea benchmark.

Reuters' monthly survey of 30 analysts forecasts Brent crude oil will average $109.70 per barrel in 2013, down from $111.70 last year.

U.S. light crude is likely to remain weaker than Brent, but it will close the gap on the North Sea grade, analysts say. They now see U.S. crude averaging $96.40 per barrel this year, up $2.50 from last month's projection and above the 2012 average of $94.15.

"Global oil demand is set to pick up gradually. This will be in line with our global economic growth forecasts. However, since global supplies are expected to grow at a similar or even faster pace, the impact on oil prices will be nil (or could even be negative)," ABN Amro Energy Economist Hans van Cleef said.

Several analysts argue the U.S. oil market could be a little stronger than other markets, particularly early in the year.

"While supplies have increased over the past few months, weather-related delays in North America due to a much-colder-than-normal climate could weigh on supplies in the first quarter," GAIN Capital analyst Chris Tevere said.

Tevere expects U.S. crude oil futures to average $93.00 per barrel in 2013.

NO PRICE PLUNGE

The poll forecast Brent prices would average $107.60 per barrel in 2014, and $107.10 in 2015.

Eleven analysts forecast Brent would average more than $110.00 in 2013, the median of the forecasts, compared with eight in last month's poll. Two analysts saw Brent below $100.00 in 2013, compared with three analysts last month.

Barclays has the highest Brent price forecast in the poll with $125.00 per barrel for 2013, while CRISIL has the lowest with $97.50 per barrel for the year.

"In spite of renewed signs of China's economic growth, crude oil prices are expected to decline in 2013 and average between $98.00-103.00 per barrel due to overall weak global demand and increase in global crude oil supply, both from OPEC and non-OPEC," CRISIL Research Director Rahul Prithiani said.

Despite a slightly more bearish outlook for Brent, analysts discounted the possibility of a sharp plunge in prices, with most saying Saudi Arabia would maintain its role as a swing producer and keep oil prices in check.

"I expect some pressure on oil prices, but no 'plunge' as the downside is protected by Saudi Arabia's fiscal budget needs, which will put a floor under the oil prices," said ABN Amro's Van Cleef, who expects Brent to average $105.00 this year.

Three analysts saw $90.00 per barrel for Brent as the threshold that could trigger cutbacks in supply from OPEC members, especially Saudi Arabia.

(Additional reporting by Ratul Ray Chaudhuri; editing by Christopher Johnson and Keiron Henderson)

 Print
Jan 28- U.S. light crude oil futures are likely to outperform Brent this year, a Reuters poll of analysts shows, as increasing global supplies and economic uncertainty weigh on the North Sea benchmark. Reuters' monthly survey of 30 analysts forecasts Brent crude oil will average $109.70 per barrel in 2013, down from $111.70 last year.

   
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