Don't Expect Significant Pullback on Price of Oil -- Reuters

Link here.

Despite all the financial and economic gloom, 2011 has been a record year for oil with Brent crude at its highest-ever average above $110 per barrel, and few analysts forecast a big drop in price, even those who expect an economic slowdown.

Rising demand for fuel from China and other emerging economies, declining output from traditional suppliers including the North Sea and interruptions to production in key exporters such as Libya have kept the oil market tight.

And unless the United States, the world's biggest oil consumer, slips into a double-dip recession, oil prices are likely to stay strong, at least until the end of the northern-hemisphere winter.

"World oil demand is growing and, if supplies don't increase, either inventories have to fall or prices rise: both have been happening."

Data points:

• Global oil demand probably increased by about 900,000 bopd this year, to more than 89 million bopd
  
• Next year, world demand for oil will rise even faster, by about 1.3 million bopd (China, India, Brazil to use more)

For those folks who have been touting production costs at $5/bbl for Saudi Arabie, Duetsche Bank begs to differ:

This is even more likely given the rising cost of production for OPEC members in the Middle East Gulf, which analysts at Deutsche Bank now estimate as high as $86.50 per barrel.

Also, in the article:

Goldman Sachs, the most accurate oil price forecaster over the last year, now sees Brent at $125 per barrel in 12 months.

I've seen that same number elsewhere, and if the Bakken oil is tanked/piped to Louisiana it can be sold at Louisiana sweet oil prices, which compare favorably with Brent.