Enjoy $60 oil while it lasts, says the International Energy Agency. Because it’s going back to $100+ as soon as the global economy recovers (which will be when?):
FT: Oil prices will rebound to more than $100 a barrel as soon as the world economy recovers, and will exceed $200 by 2030, the International Energy Agency will say in its flagship report to be published next week.
“While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over,” the report states.
The developed world’s energy watchdog has doubled its long-term price expectation from last year’s $108 a barrel for 2030 and assumes oil prices will rebound from today’s $60-$70 a barrel to trade, in real terms adjusted by inflation, at an average of more than $100 a barrel from 2008 to 2015.
The IEA’s World Energy Outlook has come to this conclusion largely because it believes companies will struggle to pump enough new oil to offset the steep production declines of the world’s older fields.
“Current global trends in energy supply and consumption are patently unsustainable,” the report states.
In its WEO report, an executive summary of which has been obtained by the Financial Times, the IEA estimates that by 2010 oil companies will have to commit to projects producing almost as much oil as Saudi Arabia – or about 7m barrels a day – if the world is to avoid a supply crunch by the middle of the next decade.
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