The strong US and Chinese economies as well as an array of supply issues look set to keep oil prices high next year, with markets pointing to a price of 70-$75 a barrel, the IMF said.

The International Monetary Fund warned that a further escalation in oil prices beyond that level cannot be ruled out in the event of deteriorating tensions involving Nigeria, Iran or other key crude suppliers.
'Oil price increases over the past eight months have reflected buoyant global activity, which has tempered the response of oil demand to higher prices, and supply concerns related to geopolitical uncertainties,' the IMF said in its semi-annual World Economic Outlook report.
'Looking forward, with spare capacity expected to remain tight, futures markets suggest that prices of crude oil will remain high for the remainder of 2006 and 2007.' Spiralling oil prices since 2003 have had little impact on demand which remains robust overall principally due to the strong gross domestic product (GDP) growth in China and the US, the IMF said.
Crude prices have little chance of dropping sharply towards $50 unless energy demand tapers off sharply due to slowing economic growth or supply worries ease in key oil producers, the report said.
'Overall, it appears that price increases since 2003 have had some dampening effect on demand but the strength of GDP growth in many countries, especially China and the US, has prevented a fall in overall consumption,' the IMF said.
'A sharp drop in prices (say, to $50 a barrel) would require either a significant fall in demand induced by slower economic growth or an easing of ongoing geopolitical tensions.'
Crude prices have risen sharply over the last three years from around $33 at the end of 2003 to a July peak of more than $78 that accompanied a diplomatic standoff over Iran's nuclear ambitions, war in Lebanon and a key oil field shutdown in the US.