UPDATE 1-Palm prices could rise to 2,950 rgt/T in January if Brent oil gains - analyst Fry

- analyst Fry@ (Updates with production outlook.)

NUSA DUA, Indonesia, Nov 3 (Reuters) - Malaysian crude palm oil (CPO) prices could rise to a high of 2,950 ringgit ($697) per tonne in January before falling to 2,600 ringgit if oil prices rise until the second quarter of the year, leading analyst James Fry forecast on Friday.

Fry, the chairman of commodities consultancy LMC International, had last forecast in September for Malaysian benchmark prices to fall below 2,400 ringgit per tonne in November and December, as overseas appetite for the commodity falters over the winter period.

"Brent is pulled between Saudi Arabia's desire to raise values before the huge Aramco IPO and U.S. shale oil's response to higher prices," he said, referring to the initial public offering of Saudi Aramco, Saudi Arabia's state-owned oil company.

"If you think the Saudi's will hold sway, at least until Q2, CPO futures peak at 2,950 ringgit in January and then fall back towards 2,600 ringgit," he said at an industry conference in Bali, Indonesia.

With Brent prices at $60 a barrel, Fry estimates palm oil peaking at over 2,800 ringgit per tonne in January, before falling below 2,500 ringgit.

Prices of the tropical oil would drop towards 2,300 ringgit per tonne with oil prices at $55 a barrel, he added.

Benchmark Bursa Malaysia crude palm oil futures climbed to their highest since Sept. 15 earlier this week, but is down about 9 percent so far this year.

It was last down 0.6 percent on Friday evening at 2,804 ringgit a tonne.

Brent crude oil prices rose as high as $61.70 a barrel on Wednesday, its highest intraday level since July 2015, and was last up 0.2 percent at $60.71 a barrel.

Palm oil prices are expected to climb as production growth this year has not come in as much as expected due to the lingering effects of the El Nino.

The El Nino weather pattern in 2015 curtailed palm oil production in Southeast Asia as it brought hot, dry weather to the region that limited palm fruit yields.

Fry later said on the sidelines of the conference that Malaysia's palm oil production could reach nearly 21 million tonnes in 2018.

Indonesian output this year is forecast at nearly 36 million tonnes, said Fry, and could see additional growth of 4 million tonnes in 2018.

"For Indonesia we have an increase of another 4 million tonnes or so from 2017. The recovery is continuing, and a lot of the area planted is maturing, so you add all these things," he said.

Indonesia and Malaysia produce nearly 90 percent of global palm oil supplies. ($1 = 4.2310 ringgit) (Reporting by Emily Chow; Editing by Christian Schmollinger)