By Vijaykumar Vedala
(Reuters) - Oil analysts expect the price of crude to rise steadily this year but remain in a tight band dictated by U.S. shale output growth on one side and OPEC supply restraint on the other, a Reuters poll showed on Wednesday.
The survey of 37 economists and analysts forecast Brent crude (LCOc1) would average $63 a barrel in 2018, slightly higher than $62.37 projected in the previous month's poll.
"OPEC's level of compliance (with agreed production curbs) and the pace of U.S. shale's output growth are likely to be the key fundamental price drivers in 2018," Ashley Petersen of Stratas Advisors said.
"Prices will likely be more volatile in 2018 than 2017, driven by whipsawing sentiment around the pace of U.S. growth."
U.S. oil production
"The U.S. has stolen the show somewhat," said Cailin Birch, an analyst at the Economist Intelligence Unit.
"That its oil market is dominated by a large number of uncoordinated, private-sector firms, many of whom benefit from lower production costs than producers elsewhere, means the U.S. will remain a major player for the foreseeable future."
Meanwhile, OPEC is closing in on its goal of reducing oil inventories held by industrial nations to their five-year average, figures from the group's head of research showed this month.
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to cap output by about 1.8 million bpd in a deal running from January last year until the end of 2018.
Saudi Arabia last week said it hoped OPEC and its allies would be able to relax production curbs next year and create a permanent framework to stabilise oil markets after the deal expires.
"The supply deal remains a key uncertainty for the oil market. A transition of the deal is needed but not yet visible, with both an over-tightening and an orderly unwinding being potential scenarios," said Norbert Rucker, head of commodity research at Swiss bank Julius Baer.
Analysts said that without a smooth exit from the pact, global inventories may drop sharply and trigger a potentially damaging price rise.
Oil output in Venezuela, one of OPEC's larger producers, has dropped to its lowest in more than 20 years as the country grapples with an economic crisis, in turn helping curtail OPEC's supply beyond the group's agreed 1.2-million bpd commitment.
Growing demand from Asian economies, led by China, was expected to absorb part of the increase in U.S. supply.
"Rising global oil demand will be driven mainly by emerging markets, with non-OECD consumption rising by an average of 2.8 percent per year in 2018-19, which would be the fastest rate since 2013," the Economist Intelligence Unit's Birch said.
U.S. light crude (CLc1) is forecast to average $58.88 a barrel in 2018, up from $58.11 in the January poll.