Oil Prices To Return To $100 A Barrel By End Of 2009

Posted on 28. Jan, 2009 by Ross in Energy Prices

Prices of crude oil may rise back up to $100 a barrel this year despite the drop in demand brought on by the current economic downturn. This was the projection from a monthly report released yesterday by the Centre for Global Energy Studies (CGES), based on the Organisation of Petroleum Exporting Countries (OPEC) fully implementing its planned production reductions.

OPEC announced a record-breaking 9% cut in production back in December which came into force in the new year, and further cuts will be high on their agenda at their next meeting scheduled for March. The recent decimation of the value of crude oil seems to have bottomed out recently as the market hovers above the $40 a barrel mark, with supply and demand now more equivalent than before, and expected further cuts will likely see the prices begin a firm recovery.

Even if OPEC only fulfills 75% of its planned cuts, CGES says, the price of crude oil is expected to return to $65 a barrel, with short-term alarmism over gloomy economic headlines failing to prevent a return to higher energy prices.