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Chinese Scientists Expect Continual High Oil Prices

Posted on: Friday, 17 February 2006, 09:00 CST

Chinese scientists expect continual high oil prices

BEIJING, Feb. 16 (Xinhua) -- A Chinese forecasting scientist said on Thursday that the price of oil on the international market would remain at a relatively high level in 2006 - but would not break any records.

Fan Ying, a senior researcher at Institute of Policy and Management under the Chinese Academy of Sciences (CAS), said, "If there are no conflicts in oil-rich areas, the oil price will stay at a relatively high level, rather than exceed the record."

Fan and his team made the conclusion based on careful studies on the price fluctuation in 2005 and an oil price forecasting model that they invented themselves.

"The Iranian nuclear crisis and venture capitals are mostly likely to affect the oil price," Fan said.

The research team estimated that the price will be down to under 60 U.S. dollars per barrel in March and then rise to over 60 U.S. dollars again in May. The summer and winter peak seasons for oil consumption might result in price increases, but they will not exceed 68 U.S. dollars per barrel.

If there are regional conflicts, Fan forecasted, the highest price of crude oil might be about 76 U.S. dollars per barrel before returning to about 65 U.S. dollars when the conflict is over.

"We made our estimation mainly on analyses of crude oil price fluctuation in the previous two Gulf Wars," Fan said.

The research into oil prices was sponsored by the National Science Foundation of China.

Source: Xinhua News Agency - CEIS

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