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Forecast: Crude Oil Peak Ahead

May 31, 2010 at 11:39 by Vladimir Vyun

Oil prices were heavily hit by the economic recession in 2008, but now they are rapidly rebounding. Will this trend continue in the next years?

In fact, analysts expect the so-called Oil Peak. Global production probably isn’t ready to satisfy quickly growing demand. While developed countries are expected to keep their consumption of oil on stable level or even experience a slight decline of demand, developing countries, primarily China and India significantly accelerate the rate of their consumption, leading to noticeable jump in the global demand in coming years. China’s oil demand has increased 28% over a year by January 2010. In the same time, any noticeable increase of production isn’t expected. OPEC considers their current level of production in target range and isn’t planning to expand it. There is expected an increase of output from Non-OPEC producers, but it’s unlikely that their supply will be enough to satisfy the ever-growing demand. New sources of oil, like findings in Brazil, Columbia and Mexico looks perspective, but it may take a lot of time before the actual drilling will begin.

The growth of oil prices may be not very noticeable in the next two years as the economies worldwide are struggling to recover. Crude oil prices averaged $84 per barrel in April 2010. Oil prices will average about $84 per barrel over the second half of 2010 and rise to $87 by the end of 2011. By 2015 consumption should exceed supply by 10 million barrels per day (MBD). By 2030 the global demand will reach 118 MDB, while producers will be able to supply only 110 MBD. Barring any unexpected major occurrence, like developing and implementing some new sort of fuel instead of conventional gasoline and diesel fuel or significant easily accessible find, by 2030 crude oil price will soar above $100 per barrel level, maybe even jumping as high as $150 per barrel.

If you have any questions or comments about the future trading for the Oil, use the form below to reply.

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