By Angela Macdonald-Smith
Feb. 12 (Bloomberg) -- National Australia Bank Ltd. raised its forecast for average 2008 U.S. benchmark crude-oil prices to about $85 a barrel, up 31 percent from a September estimate, due to rising demand and production restrictions on OPEC members.
West Texas Intermediate crude oil may average $75 a barrel next year, the Melbourne-based bank, the nation's biggest by assets, said today in an e-mailed report. Brent crude oil, a European benchmark variety, may average $83 a barrel this year, falling to $72.43 next year, the bank said.
The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world's crude, earlier this month decided to keep production targets unchanged, rebuffing a request from U.S. President George W. Bush for more oil. The group may decide to cut output when it meets next month to keep the price above $80 a barrel, oil ministry officials from four of the group's nations said last week.
``OPEC appears to be increasingly emboldened by sustained high prices, with OPEC oil ministers appearing to discount any risks of economic calamity resulting from high oil prices, a stark contrast from recent years,'' Gerard Burg, a minerals and energy economist at National Australia, said in the report.
Global oil consumption is forecast to increase by about 2.3 percent this year, to average 87.8 million barrels a day, mostly because of growth in China and the Middle East, National Australia said, citing the International Energy Agency.
Gasoline, Diesel
Prices for refined fuels will be boosted by the ``elevated'' crude-oil price forecast, with exchange rates being the main uncertainty for forecasts of local retail prices, the bank said. In Australia, weighted average city retail prices for unleaded gasoline may average A$1.363 ($1.23) a liter this year, up 9.4 percent from last year's average, it said. Next year the average may decline to A$1.309, it said.
U.K. wholesale diesel prices may rise by 23 percent to average 34.9 pence (68 cents) a liter, with the increase heightened by an expected weakening in the pound against the dollar, National Australia said. Jet fuel should move in tandem with crude oil, with benchmark European prices increasing by about 16 percent to average $824 a metric ton, it said.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Last Updated: February 12, 2008 00:30 ESThttp://www.bloomberg.com/apps/news?pid=20601081&sid=aW3gJs8RChoQ&refer=australia
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