Barclays Capital raised its 2011 oil price forecasts on Thursday to reflect the cumulative effect of the fundamental and geopolitical developments in 2011 and importance of events over the past 10 days in particular, the company said in a note to clients.

The investment banking arm of Barclays , raised its 2011 average oil price forecasts to $112 for Brent and to $106 for WTI, both up from $91.

We expect a sharp compression in the WTI-Brent spread as the year progresses, with the spread remaining prone to dislocation but normally tending toward a small WTI premium, Barclays said.

We believe that the impact of the Libyan situation for the oil market is likely to become prolonged, regardless of the military outcome. it added.

The 2012 forecasts were unchanged at $105 for both WTI and Brent as they already contained an allowance for an injection of a large degree of geopolitical movements, particularly in Iraq and Iran.

The 2015 forecasts of $137 WTI and $135 Brent also remained unchanged.

The brokerage also introduced a 2020 forecast of $185 for WTI and $184 for Brent. (Reporting by Soma Das in Bangalore; Editing by Lisa Shumaker)

Iraq Barclays Price