Analysts don’t expect oil prices to reach 2008 levels

Article by Christian A., 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

Recommended

A few months ago, Mercedes-Benz promised that they will be treating everyone to a “big surprise” during the Monterey Car Week. And true enough, many of us were stunned as...
by - August 19, 2017
McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 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