Thursday 25 April 2024
 
»
 
»
Story

Oil to stay over $100 through 2009 says EIA

New York, June 3, 2008

Oil prices should stay above $100 a barrel through 2009 and potentially longer as supply struggles to keep up with demand, the government's top energy forecaster said on Monday.

'You've got this global market still operating at very low spare (oil production) capacity, all of which is in Saudi Arabia,' Guy Caruso, head of the Energy Information Administration (EIA), told reporters at the Reuters Global Energy Summit in New York.

Crude oil prices have risen six-fold since 2002 to around $130 a barrel as rising demand from China and other developing countries strains supply - a spike that has added pressure to a US economy already hobbled by a housing crisis.

Caruso said the oil price surge will likely spell further hikes in US gasoline prices this summer.

'We still have some pass-through (to the gasoline pump) of the higher crude oil prices that we've seen now over the last number of weeks,' Caruso said. 'If the crude oil prices stay around $120, $125, it looks like (gasoline) might be somewhere in the $4.10 area.'

Caruso added that the EIA will likely revise its estimate for US oil demand for 2008 downward by 10,000 barrels per day when it releases its monthly outlook next week due to the effects of rising prices.

But he said any slowdown in the United States is being tempered by continued strong demand growth for energy in Asia and the Middle East, keeping the oil market tight.

Jeff Kupfer, acting deputy secretary of the US Department of Energy told Reuters on Monday that the government has no quick fix to the spike in fuel costs, but that the administration of President George W. Bush was 'in constant contact' with Opec members to urge the cartel to boost output.-Reuters




Tags: Oil Prices | demand | EIA | surge |

More Energy, Oil & Gas Stories

calendarCalendar of Events

Ads