By Dylan Bowman and Reuters
Consumer nations reeling at rocketing oil prices can expect much worse next year, economist warns.
Consumer nations already reeling at the rocketing cost of oil can expect things to get much worse next year with a leading economist predicting prices of at least $100 a barrel to become the norm.
“We’re in a world of triple-digit oil prices for the foreseeable future,” Jeff Rubin, chief economist at Canadian investment bank CIBC World Markets, said on Tuesday, reported newswire MarketWatch.
“Whether it’s $100 or $140 a barrel... is up to debate, but the bottom line is we’re in the bottom of the ninth inning of the hydrocarbon age.”
The economist’s comments come just days after Iran warned crude could rise to about $90 a barrel by December if the US dollar continues to lose value.
The price of oil fell nearly $2 to below $80 a barrel on Tuesday on continued profit-taking from last week's record high, as more output was restored in the Gulf of Mexico following shutdowns triggered last week by a storm.
A combination of falling US crude stocks, concern over storm damage to Gulf of Mexico oil installations, a half-point cut in key US interest rates and a weak dollar had pushed oil to a record $83.90 a barrel last month.
Speaking at the CIBC 2nd Annual Industries Conference, Rubin said that soaring costs and dwindling supplies will force countries to focus more on nuclear energy and biofuels to meet demand.
“I’m not sure in 50 or 60 years, oil will still have the role in the global energy market that it does today,” he said, quoted MarketWatch.
Looking forward, Rubin said that as supplies diminish oil producers will focus more and more on meeting domestic demand, compounding the impact on the world’s largest consumers such as the US.
Six of the largest suppliers to the US, including Saudi Arabia, plan to cut their global exports by a combined total of 7% by 2012, Rubin said, which “reflects the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption”, according to the newswire.