Oil prices are expected to average $50 per barrel for the remainder of the year based on Dated Brent as the benchmark, a Centre for Global Energy Studies report has said.
The reference case forecast takes into account the dire state of the world economy and expects global demand to fall by 900,000 barrels per day (bpd) in 2009. It also does not foresee any further compliance by Organization of the Petroleum Exporting Countries with the quota reductions announced last December.
Dated Brent was expected to have average $45 per barrel in the first quarter, rising to $50.4 per barrel in the second and $51.8 per barrel in the third, then up to $53.4 per barrel in the last three months of this year.
"With demand set to fall dramatically, it is what happens to supply that will determine the price of oil," CGES said in its monthly oil report.
The report assumed that OPEC will keep its output relatively constant through the first quarter before leaking oil as prices marginally rise.
But if OPEC fully complied with the quotas, the report suggested that oil prices would rise much more rapidly throughout 2009, reaching an average of $74.3 per barrel in the final quarter, leaving an average of $57.4 per barrel for the year.
