World Oil Price to Drop to 50 US Dollars Per Barrel in One Year: Economist
World oil price to drop to 50 US dollars per barrel in one year: economist
BEIJING, Sept. 13 (Xinhua) — A chief economist of the journal Economist said here Tuesday that the international oil price is expected to fall back slowly to 50 US dollars a barrel in one year.
When meeting with economic analysts of Xinhua News Agency, Robin Bew, a chief economist with the Economist Intelligence Unit of the Economist magazine predicted that the international oil price will drop back slowly with the slowing down of the global economic growth in the next two years.
Strong demand is the cause of the recent soaring oil price, in contrast supply reduction leading to the oil crises in the early 1970′s an 1990′s , said Bew.
So the recent oil soaring trend will not exert a big impact on global economic growth, he said.
However, as the economic growth of major economic bodies such as China, the United States, Western Europe and Japan are slowing down, Bew predicted that global oil demand will rise more slowly.
Bew predicted that in 2006, the international oil price would fall back to some 50 US dollars per barrel.
“With more oil fields coming on streams and the continuing slowing trend of world economic growth, the gap between oil supply and demand will enlarge and the oil price will drop to 40 US dollars per barrel then,” he said.
However, if incidents that will lead to sharp supply reduction occur, there will be possibility that international oil price will hike in short term, he said
In the supply and demand of the international oil market, there is no shortage of supply of crude oil, said Robin Bew.
But the tension between oil supply and demand is so tight that any incidents that may lead to supply reduction may give reasons for the hiking of oil price in the futures market, he said.
However, with the slowing down of the global economy and the widening gap between demand and supply, speculators will finally lose the point and leave the market, he said.