National Australia Bank Raises Oil Price Forecasts

National Australia Bank Raises Oil Price Forecasts Through 2008
By Angela Macdonald-Smith
Sept. 28 (Bloomberg

National Australia Bank Ltd., the country's biggest lender, raised its forecasts for crude oil prices through 2008, citing the ``tight'' balance between supply and demand.

West Texas Intermediate, the U.S. benchmark oil variety, may average $66.50 a barrel this year, up from an earlier forecast of $63, while prices may average $65 next year, up from a previous forecast of $60, the Melbourne-based bank said in a quarterly report. Brent crude, a European benchmark, may average $66.90 this year, and $62.78 next year, it said.

``Reflecting the tight market conditions, forecast crude-oil prices have been revised upwards this month,'' National Australia analysts led by Gerard Burg said in the report. ``In 2008, crude markets are expected to remain tight, supported by OPEC production discipline and strong demand from industrializing nations.''

OPEC's influence over the market is set to increase, as Angola's decision to joint the group at the start of 2007 reduced opportunities for production growth outside the cartel, National Australia Bank said.

``Increasing market power for OPEC will be the most significant development in global oil markets in coming years,'' the analysts said.