Dec. 1 (Bloomberg) -- Crude oil prices may fall 7.5 percent next year because of an increase in supplies from Russia, Brazil and Angola, said Bank Julius Baer & Co., Switzerland's largest independent money manager.

U.S. benchmark crude, the West Texas Intermediate, will average $62 a barrel in 2007, down from an earlier prediction of $69, Edward Ennis, an analyst with Julius Baer, said in a research note. Oil may average $67 this year, Ennis said.

Crude oil has fallen 20 percent from an all-time high of $78.40 reached on July 14, prompting the Organization of Petroleum Exporting Countries to consider cutting output for a second time this year. Prices have dropped because of rising U.S. stockpiles and concern that demand growth will slow.

``The market has moved from being demand driven to a scenario where today's market is becoming more supply driven,'' Ennis said in a telephone interview yesterday. ``This means that any lack of supply or additional supply growth will have a greater impact on the price.''

Supply from countries outside OPEC will increase 1.6 million barrels a day in 2007, more than the estimated demand growth of 1.5 million barrels a day, Julius Baer said.

Crude oil for January delivery fell as much as 53 cents, or 0.8 percent, to $62.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $62.77 at 9:54 a.m. in London.

Julius Baer cut the 2008 oil price average to $65 a barrel from $72. Oil at $62 a barrel is the median price from the latest survey of 35 analysts conducted by Bloomberg News.

Non-OPEC Supply

Non-OPEC supply is expected to increase 3.1 percent to 53.3 million barrels a day by the fourth quarter of 2007 from the previous three months, the International Energy Agency said on Nov. 10.

The former Soviet Union and Africa will each add 600,000 barrels a day of production by the end of 2007 with Latin America contributing 200,000 barrels a day, the IEA said.

``If these non-OPEC projects all happen as forecast then we will have a lot of supply growth and that weakens prices,'' Ennis said.

OPEC cut its estimate for 2006 demand for its crude by 200,000 barrels a day, to 28.7 million barrels a day, because of lower global demand and a higher expectation for non-OPEC supply, the group said on Oct. 16. They cut their output by 1.2 million barrels a day to halt the slide in prices from the July 14 high.

OPEC will try to keep oil prices within $50 and $55 a barrel, Ennis said. China's purchases to fill its emergency stockpiles will limit declines.

Demand for OPEC oil will fall to 28.9 million barrels a day in the first quarter of 2007 from 29.8 million barrels in this quarter, the International Energy Agency said Nov. 10.

Supply Disruptions

Lehman Brothers Holdings Inc. said average oil prices next year will rise an average 9 percent, or $6 a barrel, because of possible supply disruptions.

West Texas Intermediate will average $73.50 a barrel next year, and Brent crude $72 a barrel, wrote Edward Morse, Lehman's chief energy economist, in a Nov. 17 research note.

``Given the potential for weather or politics to interrupt supplies, we judge it more likely than realized prices will exceed rather than fall short of our forecast,'' Morse said.

To contact the reporter on this story: Christian Schmollinger in Singapore on christian.s@bloomberg.net.

Last Updated: December 1, 2006 05:00 EST