Experts Forecast Continued Lower Oil Prices At Least For Next 12 Months

November 3, 2008 9:00 a.m. EST

New York, NY (AHN) - Despite speculations oil prices may go up again as a result of benchmark interest rate cuts in a number of countries, including the U.S., oil experts agree that while the threat remains hanging, a dramatic price increase is unlikely in 2009..

Tim Parker, energy analyst of Y. Rowe Price, was quoted by the Chicago Tribune, "I think that oil prices are likely to bounce between $60 and nearly $100 a barrel, but I doubt we'll face triple digits in the next 12 months."

Parker does not discount the possibility oil prices will soar again, because of the continued dependence of the U.S. and other countries on foreign oil, but that would likely take place within a three-year horizon.

"Gasoline prices at the pump should be headed down to $2.50 a gallon, depending on where you are... As oil prices head back toward $100 a barrel, pump prices will be between $2.50 and $3, but won't be $3.50 a gallon until oil prices area at $120 or $150," Parker added.

Philip Weiss, oil analyst of Argus Research, estimated average oil price for the 4th quarter of 2008 will be $80 a barrel and $90 for 2009.

Following the global economic meltdown and the lower consumer and industrial demand for power, oil prices has plummeted from almost $150 per barrel in July to less than $70 or a 27 percent decline the past 12 months.

Because of this development, the Organization of Petroleum Exporting Countries will cut production by 1.5 million barrels a day.