* Brent seen averaging $105.90, WTI $98.70 in 2014
* Brent-WTI differential seen averaging $7.20 this year
* For a table of crude price forecasts, see
* Reuters Graphic: link.reuters.com/bag79v (Adds link to Reuters Graphic)
By Arpan Varghese
May 30 (Reuters) - Brent crude oil prices are expected to drop sharply in the second half of this year as ample supply and tepid demand offset worries over political risks, a Reuters poll of analysts showed on Friday.
Brent crude oil will average $105.90 a barrel in 2014, the Reuters monthly survey of 28 analysts projected, below the $108.19 average seen so far this year.
The benchmark is expected to continue to slide over the next two years, averaging $102.50 per barrel in 2015 and $100.50 in 2016, according to the poll. Brent averaged $108.70 in 2013.
In order to average $105.90 for 2014, Brent would need to drop sharply to an average of $104.26 a barrel for the remaining seven months of this year. That is nearly $6 below the current market level of around $110 a barrel.
Analysts forecast U.S. light, sweet crude, also known as West Texas Intermediate or WTI, would average $98.70 a barrel in 2014, slightly above the $98.05 average in 2013. WTI has averaged $99.93 so far this year.
“Brent is expected to moderate further as Iraq, Iran and Libya continue to ramp up production, while WTI will moderate from a robust U.S. supply,” National Australia Bank analyst Vyanne Lai said.
Analysts expect demand growth to lag behind supply growth as the global economy recovers at a moderate pace.
Oil demand will be affected by increasing energy efficiency, substitution with natural gas and the removal of subsidies in some developing countries, said Rahul Prithiani, a director at CRISIL Research.
Brent’s premium CL-LCO1=R to its U.S. counterpart should narrow to $7.20 a barrel in 2014 from $10.58 last year, the poll showed.
“We expect the Brent-WTI spread to narrow this year as (U.S.) refineries make more use of U.S. oil and continue to lower imports,” Thomas Pugh of Capital Economics said.
“However, at least some spread is likely to persist over the next few years as U.S. exports remain effectively banned, and refineries remain set up to process heavy oil.”
Raiffeisen Bank International had the highest 2014 Brent forecast at $112 a barrel, while Natixis had the lowest at $99.40. (Additional reporting by Koustav Samanta in Bangalore; Editing by Christopher Johnson and William Hardy)