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- Aug 22, 2008
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A return to $100 oil may not be in the cards for at least the next three years, after industry observers sharply lowered their short-term oil and gas price forecasts. But Calgary-based AJM Petroleum Consultants on Tuesday said the longer-term outlook remains intact after it reduced its 2009 oil price forecast to US$55 a barrel. However, the petroleum engineering firm sees oil rising to $75 in 2010 and $100 in 2013. After hitting an all-time high of $147 in July, benchmark US crude prices fell to a five-year low below $34 prior to the holidays. After rebounding near $50 on Tuesday, New York-traded futures dropped about 25 cents to $48.58. "While our revised forecast is now less positive in the short term than our previous one, we are still anticipating higher oil prices in the longer term," said Ralph Glass, AJM`s chief economist and VP of operations. "AJM is of the opinion that we saw the bottom for hydrocarbon prices in October. We anticipate prices will move into a slow recovery, dependent, of course, on the world recession and the time it takes to come out of that recession." Likewise, GLJ Petroleum Consultants slashed its full-year outlook to $57.50, or more than 40% from the $100 prediction made on Oct. 1 of last year. It doesn`t see $100 oil returning in today`s adjusted dollars until 2018.
Patricia Mohr, a commodities analyst with Scotia Capital in Toronto, said she remains bullish for higher oil prices as OPEC cuts take hold and geopolitical tensions remain high--although the optimism is tempered by global economic realities. After averaging about $99 in 2008,Mohr sees crude flattening off at $55 in `09 and $70 in 2010. "I haven`t really changed my views," she said. "You`ve got a global economy that`s barely just ticking over, but I think prices below $50 are oversold and I`m confident prices will tick up over time." Likewise, AJM`s Glass said lower energy prices will play a key role in pulling the world out of recession. "Americans are being lured back to the roads with gasoline sitting at $1.70 or lower per gallon (45 cents per litre)," he observed. "If president-elect (Barack) Obama`s plans to put America back to work through infrastructure revitalization begin to materialize, fossil fuels will be the engine driving the Americans to prosperity. Factors like these suggest that crude oil is currently at its bottom aver-age price, and a climb is soon to begin."
(Calgary Herald 090107)
Patricia Mohr, a commodities analyst with Scotia Capital in Toronto, said she remains bullish for higher oil prices as OPEC cuts take hold and geopolitical tensions remain high--although the optimism is tempered by global economic realities. After averaging about $99 in 2008,Mohr sees crude flattening off at $55 in `09 and $70 in 2010. "I haven`t really changed my views," she said. "You`ve got a global economy that`s barely just ticking over, but I think prices below $50 are oversold and I`m confident prices will tick up over time." Likewise, AJM`s Glass said lower energy prices will play a key role in pulling the world out of recession. "Americans are being lured back to the roads with gasoline sitting at $1.70 or lower per gallon (45 cents per litre)," he observed. "If president-elect (Barack) Obama`s plans to put America back to work through infrastructure revitalization begin to materialize, fossil fuels will be the engine driving the Americans to prosperity. Factors like these suggest that crude oil is currently at its bottom aver-age price, and a climb is soon to begin."
(Calgary Herald 090107)