“Oil has the potential to flirt with $100 this year. We forecast an average price of $137 by 2015,” said Amrita Sen, an oil expert at BarCap.
“The groundwork for the next sustained step up in oil prices is now almost complete. Global spare capacity is likely to be reduced to low levels within a relatively short time. The global economic crisis has postponed, but not cancelled, a crunch which would otherwise be starting to bite now,” said Barclays.
Capacity in non-OPEC countries is shrinking and any new finds are typically in challenging environments. High oil prices are needed to make these new projects (Canadian oil sands, deepwater, Arctic) feasible.
The next oil crunch will likely send the global economy back into deep recession.
Source: Telegraph
