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

Nearly all details have been set with regards to the upcoming market introduction of the new Jaguar I-Pace. Its production version was recently previewed at the 2016 Los Angeles Auto...
by - December 8, 2016
WM Motor, a new China-based automaker, recently revealed its forthcoming lineup consisting of affordable electric vehicles. While there is a company is the U.S. that has the same name, they...
by - December 8, 2016
Even when Aston Martin has been mum about the upcoming AM-RB 001 hypercar, Marek Reichman at least has something new to say. In a recent interview with Australia’s Motoring, the...
by - December 8, 2016
The people at Mercedes-Benz are rejoicing. This is simply because for the first time since 1979, Mercedes-Benz has assembled 20,000 – and still counting – examples of the Mercedes-Benz G-Class....
by - December 8, 2016
When Donkervoort Automobielen BV unveiled its Donkervoort D8 GTO-RS limited edition in May 2016, customer interest has been so overwhelming that the Lelystad, Netherlands-based carmaker sold out this one-of-a-kind vehicle...
by - December 8, 2016
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