Analysts don’t expect oil prices to reach 2008 levels

Article by Christian Andrei, on January 4, 2011

If analysts are to be believed, we should all breathe easy as oil prices may be rising in 2011 but they will not reach the heights that they were at in 2008. Current oil prices are now nearing $100 per barrel however analysts are confident that it won’t exceed this price because of several reasons.

One is that oil companies are making sure that before supply hits a crisis point, they will have already stepped up spending plans. Other reasons are that resource nationalism has eased; the dollar has become stronger; and there are less worries that oil production is near peaking.

But the most compelling reasons are related to short-term supply fundamentals. In particular, there is far more oil in storage, far more fuel capacity at refiners worldwide, and far more idle oil wells that OPEC can reactivate when it chooses.

The latest Reuters poll indicates that analysts anticipate an additional 8% gain in average prices in 2011. They believe that the conditions for a "super-spike" have dissipated.

Edward Morse, managing director at Credit Suisse, said that oil is different now since there are “bottlenecks that have been overcome both in refining and production capacity.” [via autonews - sub. required]

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Mercedes-Benz has revealed that in 2017, its series 124 coupé will be celebrating its 30th anniversary. While this itself is a significant event, it will also mean that this model...
by - January 21, 2017
BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries