Any particular reason for forecasting a closing price lower than today's? As stocks have been drawn down for two years (according to EIA numbers), if this continues the only way for prices is up. Unless there is significant new production, above depletion, or unless there is significant lowering of demand. If these factors are not spot on, in terms of moderating demand or increasing supply just enough, I can't see prices being roughly where they are now, except as a point on a wildly fluctuating curve.

Prices have risen 60% this year, when there hasn't been any really bad geopolitical news, though the US dollar has slumped somewhat. I can't imagine next year will be any more supportive of a stable oil price.

In terms of effects on people, I think only significant new production, that is, an increase over today's production of around 2 mbpd, would keep the world stumbing along as "normal". I don't expect that, but who knows?

Well Euan, last time I won a bet I had a lot more hair and a lot less wasteline...

But 90- 110 seems fair. So 100.01 USD / bbl on 31/12/08

Why?

If the Western Industrial economies tank, the usual madness in the middle east will offset it, keeping prices high.

And of course Russia has learnt that a) high oil prices mean luxury goods and b) oil is a potent weapon.

I reckon on about 2 years of plateau pricing as western industrial economies try to cope and mitigate, cooling down, belt tightening,etc. But before the markets finally realise that Oil output cannot grow.

Then the shit hits the fan ultimately when we wonder where all the rich tourists are for the Olympics in 2012.