By Sarah Kent --BOfA Merrill Lynch sees brief $175/bbl spike next year --Spike dependent on delays to return of Libyan crude, global growth --Risks of delays to Libyan supply remain skewed to upside (Adds 2012 forecast, details throughout.) LONDON (MarketWatch) -- Brent oil could spike up to $175 a barrel in 2012 if Libyan supply doesn't return to the market by then and the global economy avoids recession, according to Bank of America Merrill Lynch BAC +0.73% . "If Libyan production doesn't return in 2012, monetary policy remains ultra loose, and real global economic output accelerates to 4.8% as our economists project, Brent crude oil prices could briefly spike to $175/bbl next year," it said in an analyst note Wednesday. The bank currently sees Libyan supply gradually returning from the second half 2012, but warned that risks of delays to the return of output remained firmly skewed to the upside. In view of the ongoing shut-in of Libyan barrels, the bank raised its Brent crude price forecast for the fourth quarter 2011 to $102 a barrel from a previous forecast of $94 a barrel. It had originally seen Libyan oil returning to the market in just six months. The bank kept its Brent forecast for the third quarter at $110 a barrel but lowered its projection for the price of U.S. benchmark West Texas Intermediate to $92 a barrel in the third quarter from its previous forecast of $104 a barrel.

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