Oil prices to stay over $71 for rest of 2006: report

Monday, June 19, 2006 - ©2005 IranMania.com

LONDON, June 19 (IranMania) - The Center for Global Energy Studies (CGES) Monday increased its price forecast for benchmark Dated Brent crude to an average of 68.2 dollars per barrel for the whole of 2006, IRNA reported.

In its latest monthly report, the London-based center predicted in its reference case that the average price would stay above 71 dpb for the last six months of the year.

Last month, it said it expected Dated Brent to fall to an average of 68.8 dpb in the third quarter of 2006 and to 67 dpb in the final three months.

The center, established by former Saudi oil minister Zaki Yamani, suggested in its latest forecast that the pricing by Saudi Arabia, the world`s biggest oil producer, indicated that the oil-rich kingdom `is happy to sell less of its oil at a higher price`.

It believed that only if oil demand growth weakens significantly, would prices for the last half of 2006 drop below 70 dpb, believing in such a scenario rates could fall from 66.9 dpb during the third quarter to 61.7 dpb in the final quarter of 2006.

But with the hurricane season approaching in the Gulf of Mexico, CGES warned a loss of 0.5 million barrels per day (mbpd) of non-OPEC oil could push up to an average of 72.8 dpb in the third quarter and to 77.3 dpb in the final quarter with a loss of 0.2 mbpd.

It believed in such a case, Brent crude could hit an average of 80 dpb in the first quarter of 2007 with little global spare capacity available to take the pressure off soaring rates.