The Toronto Star reported on Friday that oil analysts expect the price of oil to hit $80 per barrel this year.
"We think things are just going to continue to heat up and prices to consolidate during this quarter near the old high of $70 US," said Vince Lauerman, a global energy analyst with Calgary's Canadian Energy Research Institute (CERI).
"It will break through in the second quarter and just keep on going up through the year. We expect the average to be $80 US a barrel," he added.
Rob Laidlaw, vice-president of Acumen Capital, says prices could spike even higher — up to $85 or $90 US.
The culprit, according to this article, is "continued unrest on the world stage", particularly the escalating standoff between the US and Iran.
Well, that's part of the reason, but the article doesn't delve into why there's no reserve cushion to accommodate political instability. The article hints at a reason about two-thirds through:
An increasing world demand for oil is draining away existing reserves, according to Laidlaw.
"The monsters — China and India — aren't slowing down. They're continuing to consume," he said.
Then it fails entirely to follow up with any analysis of the geological context in which the geopolitics of Iran, Nigeria, and Iraq are playing out.
(Thanks to Jason for bringing this article to my attention.)
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