Could we see $20 oil in the future? As improbable as it seems, some are predicting it:
But what about $20 per barrel oil by 2011? Oil analyst Peter Beutel of the energy consultancy Cameron Hanover thinks it could happen. Beutel told MSNBC:
"I believe we have that a lot more oil on this planet than people believe. And we are going to find it over the next few years."
Beutel thinks oil prices could fall as low as $20 a barrel in the next 4 to 8 years before beginning to rise again.
And why not? All other things being equal, higher prices encourage more exploration and more technical improvements which leads to more production. If Beutel's right, New York Times reporter John Tierney's $5,000 bet with peak oil alarmist Matthew Simmons is looking pretty good.
In times of great flux, pundits gamble on your memory issues and make all kinds of wild prognostications they can later point back to as prescience.
Then there are the oil analysts. At the beginning of last year most were still expecting the oil price to fall back. It didn’t. By the end of 2006 they had more or less given up and started forecasting long-term oil prices in the region of $70 to $100 a barrel. It should come as no surprise, then, that the oil price spent much of last week in freefall and is now hovering at about $55 — its lowest level since mid-2005. The result? Many analysts have flip-flopped and now predict oil at below $50 by the end of the year. [More]
Meanwhile, I'm retracting my prediction about Rex Grossman...