London: US crude oil is expected to average $79.44 a barrel in 2010, a Reuters poll showed yesterday, a slight decline from the June poll and the third consecutive lower monthly forecast.

The poll of 31 analysts, banks and government agencies showed a lower consensus forecast, and respondents cited Chinese macroeconomic policy, global oversupply and a seasonal drop in demand to explain their forecasts.

Oil has averaged above $75 a barrel in 2010, its second highest average price ever, but has come up against resistance any higher, as disparate global data shows a fragile recovery from the economic recession has only just begun to take hold.

"It will not be well into third quarter that oil decisively breaks above $80 per barrel," said senior analyst Harry Tchilinguirian at BNP Paribas, who left US crude forecasts unchanged based on a strong dollar and recent Chinese currency moves.

Supply tightness

Last month China reformed its currency by increasing the yuan's flexibility and ending a 23-month-old peg to the dollar. China's central bank sent clear signals it would keep an appropriately loose monetary policy.

"Inflation pressures may be building in the East, but in terms of the countries that matter for oil demand growth, we are not expecting any acceleration in the pace of monetary policy tightening in China," Tchilinguirian said.

China, with second quarter GDP growth at 10.3 per cent, imported 22 million tonnes of crude oil in June, up 34 per cent from a year earlier.

This month the Reuters oil price poll leaves the second quarter and moves into the third as the front quarter for medium-term forecasts, with some analysts saying seasonal oil market supply tightness could crop up before October.

US crude is expected to average $77.26 in the third quarter of 2010, down from $78.50 in the last poll.

"We should get the first significant stock draw of the year in third quarter of 10," said Global Oil Analyst Christophe Barret at Credit Agricole-CIB, who left their third quarter West Texas Intermediate (WTI) price unchanged but raised the year-end forecast to $78 from $77.60 in last month's poll.

"On the supply side, field maintenance in the North Sea, production disruption in Nigeria, Angola and Iraq and a very active hurricane season in the US are limiting crude availabilities in second half of 2010," Barret said.

Poll numbers showed a slightly bullish forecast into the rest of the calendar year, with fourth quarter data rising to $79.75 per barrel on guarded optimism that supply tightness will over time drive prices higher.