Oil to average record $84 this year on tight supply

By Ikuko Kao

LONDON (Reuters) - Oil will climb to a record average above $84 this year, a Reuters poll of analysts showed on Thursday.

Many analysts revised their estimates for the first quarter because they think OPEC is unlikely to raise output, even though prices have scaled to new peaks above $100, amid the weakness of the dollar and political tensions related to oil producing countries.

Some said demand from emerging markets will continue robust, although economic slowdown might later dent fuel use in the United States, the world's largest oil consumer.

The monthly survey of 30 analysts put the consensus forecast for U.S. crude futures in 2008 at an average of $84.07 a barrel, up $2.74 from last month's poll.

The average price for oil last year was $72.30.

In oil's six-year rally, U.S. crude has risen above $100 several times this year and it hit a fresh record high of $102.08 a barrel on Wednesday.

"Right now, it is dollar weakness that is driving the current prices," said Thorsten Fischer, a senior economist with Royal Bank of Scotland.

"We still see strong demand from emerging markets, especially China and India. Fuel prices are often subsidized in these countries, so high oil prices do not really have impact on demand."