While this would be a record annual average, it puts oil prices only slightly ahead of their current level and CGES said that the average could slump as low as $76 should falls in demand among the leading economies not be offset by growth in emerging nations.
Morgan Stanley has said Brent crude could trade below $90 for the first half of 2012 if the crisis in the eurozone leads to a painful recession.
But any fall in demand is likely to be met with a reduction in production by Opec that would prevent very sharp falls in the oil price.
A significant uncertainty in 2012 will be Iranian oil supply. A deterioration of the relationship between Iran and the West has led to sanctions against the oil exporter.
The European Union decided to freeze assets and imposed travel bans on several individuals suspected of having ties to Iran’s nuclear program.
Iran supplies 4 per cent of global oil and the global oil price would rise sharply if events unfolded to limit or stop Iranian supply - even if they are unlikely to hit the extravagant $250 a barrel level signalled in a warning from the Iranian Foreign Ministry.
The opposing risks of a eurozone collapse, hitting demand, and an Iranian stand-off, hitting supply, have led to a split among investors. Some are taking positions to benefit from a new super-spike while others are loading up on options that bet on an oil price collapse.
Longer-term factors continue to put upward pressure on oil. Crude oil is becoming more expensive to extract and this will add a premium to the oil we use in the future.
Any easing of demand in Europe and the U.S. as economies there slow, or even contract, are likely to be replaced by the ongoing growth in China and other emerging economies. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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