June 22 (Bloomberg) -- Lehman Brothers Holdings Inc. raised its forecast for average Brent crude oil prices this year 3.7 percent because of limits in supply growth.

The fourth-biggest U.S. securities firm increased its estimate for 2007 Brent oil prices to $70 a barrel from $67.50. Oil will average $75 a barrel in 2008, up from the previous forecast of $72, Edward Morse, Lehman's New York-based chief energy economist, said today in an e-mailed report.

``Disappointing non-OPEC supplies, OPEC's refusal to increase output, and rising product demand are tightening markets,'' Morse and colleagues Adam Robinson and Michael Waldron said in the report.

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, last year agreed to cut crude supplies by 1.7 million barrels a day to maintain oil prices around $60 a barrel.

May oil production in Norway, the world's fifth-largest exporter, slid 7.4 percent from a month earlier to an average 2.2 million barrels a day.

Brent oil for August settlement gained as much as $1.14, or 1.6 percent, to $71.36 a barrel on the ICE Futures exchange and was at $71.24 at 5:07 p.m. in London.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: June 22, 2007 12:15 EDT