Tags: Deutsche | Bank | Oil | Drop

Deutsche Bank: Oil Could Drop to $60

By    |   Wednesday, 09 Dec 2009 07:46 AM

While many experts predict higher oil prices, Deutsche Bank analysts say they could fall to $60 a barrel next year, as the sluggish economy dampens demand.

That would represent a drop of more than 20 percent from recent levels.

In a research note, the analysts predict an average price of $65 in 2010.

"The world will never run out of oil," they wrote. "If the oil age does end, it likely will be because we become more efficient and simply use less petroleum."

Non-government oil inventories for the 30 countries in the Organization for Economic Cooperation and Development rose to 2.76 billion barrels in the third quarter, just short of the 2.77 billion-barrel record in 1998, according to official data.

Many experts anticipate the U.S. economy won’t grow more than 2 percent in coming years, which obviously means lower oil usage.

"U.S. oil demand may have already peaked," the Deutsche Bank analysts say. U.S. oil consumption has slid about 10 percent from its zenith in 2005.

Even China’s oil demand will probably slip, Addison Armstrong, director of market research at Tradition Energy, told CNNMoney.com.

"There's so much spare capacity right now,” he says. It's very difficult to see prices much higher."

But many experts disagree. Oil legend T. Boone Pickens predicted at a recent conference that oil will rise to $100 next year, as global production is “maxed out” at 85 million barrels a day.

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While many experts predict higher oil prices, Deutsche Bank analysts say they could fall to $60 a barrel next year, as the sluggish economy dampens demand. That would represent a drop of more than 20 percent from recent levels. In a research note, the analysts predict an...
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Wednesday, 09 Dec 2009 07:46 AM
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