POLL-U.S. shale to keep lid on oil prices next year

Fri Nov 29, 2013 4:30pm IST

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* Brent prices seen averaging $104.10 a barrel in 2014

* Higher supply and lower demand anticipated

* Brent-WTI differential seen averaging $6.80 in 2014

* For a table of forecasts, see

By Ratul Ray Chaudhuri and Nallur Sethuraman

Nov 29 (Reuters) - Ample supplies boosted by the U.S. shale oil revolution and anaemic demand growth are expected to pressure crude oil prices next year, a Reuters poll of analysts forecast.

The monthly survey of 27 analysts projected Brent crude oil would average $104.10 a barrel in 2014, down from this year's closing average price of $108.50. Last month's poll saw Brent averaging $105.40 in 2014.

The poll expects Brent to average $102.60 in 2015.

"Increases in production from both the United States and Iraq will lead to excess supply in the market amid subdued demand growth," said Rahul Prithiani, director at CRISIL Research.

Analysts said the boom in U.S. shale oil production would be the single biggest factor impacting oil prices in 2014. Even analysts projecting substantial growth in global oil demand expected supply to outpace consumption.

"We see global demand growing slightly next year with supply growing faster (and) that should lead to a modest decline in world oil prices," said Pavel Molchanov, energy analyst at Raymond James.

Analysts said an expected easing of economic stimulus, particularly by the U.S. Federal Reserve, would impact growth and spur lower oil prices.

"Reduction of Fed stimulus could weigh on growth, not only in the developed world but also the emerging markets, and we could see this have a downward effect on crude oil prices in 2014," said Chris Tevere, analyst with Gain Capital.

Oil forecasters said the recent deal between Iran and world powers on Tehran's nuclear programme was unlikely to bring an immediate increase in crude supplies from the OPEC member.

The scope for increased oil production under the interim deal agreed in Geneva over the weekend was limited, Natixis oil markets analyst Abhishek Deshpande said.

The poll forecast U.S. light crude, also known as West Texas Intermediate or WTI, would average $97.30 a barrel in 2014, down from $99.80 in last month's survey.

Brent is seen trading at an average of $6.80 per barrel higher than U.S. crude CL-LCO1=R in 2014, the poll showed, below the $10.30 average seen so far this year.

"The relatively comfortable supply-side factors in the U.S. will keep WTI lower, with the differential largely fluctuating between the $5-$10 band," said Vyanne Lai, agribusiness economist with National Australia Bank.

Raiffeisen Bank International had the highest Brent forecast at $115 for 2014, while Capital Economics had the lowest forecast at $90 a barrel. (Reporting by Ratul Ray Chaudhuri and NR Sethuraman in Bangalore; Editing by Christopher Johnson and Dale Hudson)

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