Monday, December 12, 2005

EIA: $50/Barrel Crude Here To Stay

Among other things:
The agency said it added about $21 to the projected future price of a barrel of crude because analysts no longer believe today's tight global oil market would ease in the coming decades. This is primarily due to a belief that OPEC oil production, now 30 million barrels a day, is not expected to grow as much as had been expected. The EIA projects OPEC production at 44 million barrels a day in 2025, about 11 million barrels less than had been predicted a year ago.

"The oil is there," said Caruso, dismissing suggestions by some oil economists that global oil reserves may be peaking. But Caruso said, "It appears the pace of investment in oil production is less than what was anticipated a year ago" among OPEC countries. He did not name specific countries.

Er... how would he know?