Citigroup raises oil price forecast

By Dave Hannon -- Purchasing, 6/4/2007 1:10:00 PM

With more of the world’s oil expected to come from the OPEC cartel this year, Citigroup analysts say oil prices will average more than $62/barrel this year, up from its previous forecast of $59/barrel.

Bloomberg reports that Citigroup analysts expect that lower-than-forecast production in Norway, Mexico and delays to projects in Kazakhstan and the U.S. Gulf will curb supply from countries outside the Organization of Petroleum Exporting Countries.

“Limited visibility on new sources of long-term non-OPEC supply strengthens OPEC's ability to set a floor under prices facilitated by a creeping increase in market share,” Citigroup said in the report.

According to data from the Energy Information Administration, the OPEC average price on May 25 was $67.39/barrel while the non-OPEC average price was $65.99.

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