NEW YORK – Oil prices will fall to $70 a barrel by 2015 as new production begins in countries such as Azerbaijan, Canada, Brazil, and Kazakhstan, the US Energy Department said.
The price of oil, which closed at $134.55 a barrel yesterday, will “ease somewhat in the medium term,” the department said in its International Energy Outlook 2008. Oil will then rise to $113 a barrel by 2030, as the market remains “relatively tight.” In last year’s report, the Energy Department projected oil would be above $59 a barrel by 2030.
Prices have almost doubled in the past year, reaching a record $139.89 on June 16, partly on concern that world oil production will fail to keep pace with surging demand in countries such as China and India.
“Over the next five to 10 years, the high prices will bring on new supplies that should put downward pressure on price, but we’re not going back to the historical low prices we saw in the 1980s and ’90s,” Guy Caruso, head of the Energy Information Administration, said yesterday.
World energy consumption will rise 50 percent between 2005 and 2030, the department said in the report, released yesterday. Demand in developing countries will increase by 85 percent. Growth in Organization for Economic Cooperation and Development countries will increase by 15 percent.
The Energy Department report also included a “high price” projection, which calls for oil to rise to $186 a barrel by 2030.
“Given current market conditions, it appears that world oil prices are on a path that more closely resembles the projection in the high price case than the reference case,” the department said.
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This article was posted: Thursday, June 26, 2008 at 1:15 pm