LONDON: Brent crude oil prices are forecast to stay well above $100 per barrel despite widespread expectations of an economic slowdown, a Reuters poll said on Tuesday.
A Reuters poll of 35 analysts showed Brent crude averaging $106.80 per barrel next year and $108.60 in 2013 as demand for fuel from China and emerging economies keeps the global oil market tight.
U.S. light crude oil, also known as West Texas Intermediate or WTI, is forecast to average $92.00 a barrel in 2012 and $99.50 in 2013.
Forecasts are broadly unchanged from last month's Reuters poll as investors balance their risk strategy between strong physical markets that have given nearby oil a big premium over forward prices and a bearish economic outlook.
"High level of uncertainty is causing oil market participants to trade on the current bullish physical situation rather than an uncertain or bearish forward-looking outlook," said Societe Generale analyst Michael Wittner.
Since the publication of the last Reuters monthly oil poll on Sept. 28, Brent futures have risen by around 7 percent to above $111 a barrel.
In that time, the average forecast for Brent next year has not changed and the projection for 2013 has dropped from $110.40. The average forecast for WTI next year has dropped by just 60 cents.
Several high-profile analysts have trimmed their forecasts, including Goldman Sachs, known by some of their competitors as a 'perma-bull' for its relatively high forecasts.
Goldman has cut its price expectations on concerns the European financial crisis will restrain economic growth and curb global fuel demand.
Goldman has reduced its Brent price outlook for next year to $120 from $130, saying the market continues to focus on the risk of a new economic recession. The euro zone debt crisis worries analysts and some argue optimism over a possible successful resolution is overdone, and may herald a price correction.
"While the physical market remains tight, providing support to prompt prices, the demand outlook remains bleak," Credit Agricole global oil analyst Christophe Barret said.
The downgrade by Goldman Sachs has left Canada's CIBC with the highest forecast in the Reuters poll at $127 a barrel for next year, followed by ANZ at $123 a barrel.
Despite the worries about the economy, 27 of the 35 analysts polled by Reuters expect Brent to be over $100 a barrel next year. Barclays, which sees Brent at $115 next year, says tension between the physical and macro-related views of oil has grown.
