Grant Smith
and Mark Shenk
Bloomberg News

Oil futures known as Brent crude are poised to trade above $100 a barrel for a third consecutive year in 2013 as tension in the Middle East threatens to disrupt supply and global demand is buoyed by Chinese imports.

Oil will average $110 next year, according to the median of 30 forecasts compiled by Bloomberg News, compared with about $111.68 a barrel so far in 2012.

Brent is more likely to overshoot the 2013 median than miss it as Iran spars with the west over its nuclear program and the conflict in Syria deepens, Morgan Stanley and UBS AG said.

“Risks are skewed to the upside, related to still-high risks of escalation or confrontation over Iran and deterioration in Syria,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York, who predicts Brent will average $110 next year. “The biggest possible surprise for markets could be stronger-than-expected oil-demand growth.”

Rising prices may pose a barrier to a recovery in the global economy amid Europe’s sovereign debt crisis, U.S. budget disputes and signs of slowing growth in Asia. Record revenue for oil producers helped ensure supply stability this year, encouraging Saudi Arabia to pump at its highest rate in three decades, while financing shale projects in the U.S. that fostered the nation’s biggest production increase in 50 years.

Iran’s oil exports have collapsed 50 percent from year-ago levels because of tightened restrictions on sales imposed by the United States and Europe this summer, the International Energy Agency said.

The United States will probably seek to bring Iran back to international talks in the first quarter of 2013, renewing focus on the issue and adding to the so-called oil-price risk premium, Michael Wittner, the New York-based head of commodities research at Societe Generale SA, said in a Dec. 21 note.

Prices have also gained on signs that the uprising against Syrian leader Bashar Al-Assad is heightening discord between Iran, a predominantly Shia Muslim nation that has given military support to Assad, and Saudi Arabia, a Sunni-majority kingdom assisting opposition forces.

Paul Horsnell, the head of commodities research at Barclays in London, expects Brent to average $125 a barrel next year, the highest forecast tracked by Bloomberg.

Brent has advanced 2.7 percent this year to $110.31 a barrel on the London-based ICE Futures Europe, and is on course for an annual average record. The North Sea grade rallied 22 percent in 2010 and 13 percent last year, when it averaged $110.91 a barrel.

Global oil demand will expand by 1 percent next year to 90.5 million barrels a day, versus growth of 0.9 percent in 2012, the IEA predicted.