Oil prices to average near $65 this year and next

By Randy Fabi

LONDON (Reuters) - Analysts have raised their average oil price forecasts for this year and next as tight global energy supplies were expected to offset any weakening of the U.S. economy, a Reuters poll showed on Friday.

The monthly survey of 35 analysts put the consensus forecast for U.S. crude futures CLc1 this year at an average of $64.90 a barrel, up 20 cents from last month's poll.

Analysts predicted Brent crude futures LCOc1 to average $66.30 a barrel, down one cent from July's poll.

"The major bullish factor is OPEC's continued nonchalance in the face of higher demand and falling forecasts for non-OPEC growth," said Energy Security Analysis, Inc. (ESAI) in a research note.

The Organization of the Petroleum Exporting Countries is under growing pressure from consuming nations to increase production at its meeting in Vienna next month. The group last year agreed to cut 1.7 million barrels per day.

Prices have fallen since reaching a record peak of $78.77 a barrel on August 1, but remain firm near $70.

The recent sell-off has been driven by fund selling as traders flee risky investments in the wake of a global credit crunch.

But even if the subprime mortgage crisis manages to slow the U.S. economy, analysts remain bullish that strong fundamentals will keep oil prices high.

"The tight oil situation is being driven by supply rather than demand factors and energy demand growth is centered in emerging economies, suggesting that a material global slowdown would need to be realized to have a meaningful impact on oil demand," said Goldman Sachs Commodity Research in its weekly report.

Analysts also warned a hurricane or an unseasonably cold winter could easily drive prices back to record levels.

"If this winter proves harsh, or even only more seasonal than last year's mild weather, the resulting draw on heating oil could force refiners to raise runs sharply, putting more pressure on likely low crude stocks," ESAI said.

Analysts forecast U.S. crude prices in 2008 to average $64.79 a barrel, up 48 cents from last month's poll. Brent was seen at $65.15.

Medium-term forecasts showed analysts expect oil prices in 2010 to average $57.59 for U.S. crude and $55.41 for Brent.

Reuters monitors price forecasts by analysts, consultants and government bodies.

Following are updated projections.