Oil prices are set to ease next year as slower world economic growth eases demand
for petroleum products and lean inventories return to normal, analysts say.

Consumers, though, cannot count on any real relief from steep fuel bills before
the second quarter.

Winter weather conditions and OPEC’s response to any sign of price trouble
are likely to hold the key to how quickly crude comes off.

"We don’t see oil falling significantly in the first quarter, unless there
is a significant slowdown in the US economy," said Gordon Kwan, oil analyst
at HSBC in Hong Kong.

"My personal forecast is for $USUS26 or $USUS27 Brent in the first quarter
and a more meaningful drop after that."

International benchmark Brent is expected to average $USUS23.60 a barrel for
the whole of next year, down more than $USUS5 from the mean so far in 2000 of
$USUS28.73, according to a Reuters poll of 16 analysts and economists.

Brent has slumped $USUS8 from mid-October’s $US35 peak but forecasts are little
changed from a similar survey in September which projected the crude at $US23.45
for 2001.

It has averaged just over $US19 in the past 10 years, hitting a low of $US13.50
for 1998.

Ten analysts polled for the first quarter saw Brent at $US25.98, although forecasts
varied widely between $US22.00 and $US28.35 reflecting uncertainties in the
market.

"There are all sorts of risks between now and the end of the first quarter.
Winter hasn’t really started yet and stocks are still very low," said Geoff
Pyne, London-based consultant to Standard Bank.

"But supply will certainly exceed demand by the end of the first quarter."