Energy analyst Jeff Rubin says oil will reach triple digits before year’s end.
By the fourth quarter of this year, oil prices will be back in triple-digit range, and by next year oil prices will rise to record highs, taking out the high-water mark of $147 a barrel set before the recession began in 2008, Rubin says.
Oil fell to around $85 a barrel on Friday, retreating further from an 18-month high reached on Tuesday, after a credit agency cut Greece's debt rating and investors focused on healthy oil supplies.
"We’re barely out of the recession, and already we face prices that, just a few years ago, our government, our oil industry and our economists told us we would never see," he wrote in the Globe And Mail.
“Whether we are talking about supply or demand, there is nothing on the horizon to prevent the imminent return of the very same oil prices that put us into the deepest postwar recession yet in the first place.”
After filling up on $4-per-gallon gasoline only two Memorial Day weekends ago, today’s $2.20-per-gallon average gasoline price doesn’t seem so expensive to U.S. motorists anymore, Rubin notes — and the Saudis now see $80 as a minimum price for their country to invest in new supplies.
A new study from the Natural Resources Defense Council (NRDC) study first calculated on average how much licensed drivers in each state paid for gas in 2009, and then ranked states by the proportion of income that drivers spent on gas. The study found that gas prices are sharply higher in some states than in others.
Meanwhile, oil fell Friday after reaching an 18-month high of $87.09 on Tuesday. Other analysts attributed the drop to a technical reversal, Reuters reported.
Early in the week, oil prices rose above the $65 to $85 a barrel range where they have traded since last August to touch an 18-month high.
But since then U.S. crude inventories reached their highest level in almost 10 months after rising for 10 consecutive weeks last week, an indication supply is still outpacing demand.
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